The Department of Premier and Cabinet (the ‘department’) is a government department of the State of Victoria (‘the State’) established pursuant to an order made by the Premier under the Administrative Arrangements Act 1983. It is an administrative agency acting on behalf of the Crown.
The principal address of the department is:
Department of Premier and Cabinet
1 Treasury Place
Melbourne VIC 3002A description of the department’s operations and its principal activities are included in the Report of Operations, which does not form part of these financial statements.
Basis of preparation
These financial statements are in Australian dollars and the historical cost convention is used unless a different measurement basis is specifically disclosed in the note associated with the item measured on a different basis.
The accrual basis of accounting has been applied in preparing these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the reporting period to which they relate, regardless of when cash is received or paid.
Consistent with the requirements of Australian Accounting Standards Board (AASB) 1004 Contributions, contributions by owners (that is, contributed capital and its repayment) are treated as equity transactions and, therefore, do not form part of the income and expenses of the department.
Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions to or distributions by owners have also been designated as contributions by owners.
Judgements, estimates, and assumptions are required to be made about financial information being presented. The significant judgements made in preparing these financial statements are disclosed in the notes where amounts affected by those judgements are disclosed. The significant judgement applied to value property, plant and equipment is disclosed in Note 5.4.1 of the financial statements. Estimates and associated assumptions are based on professional judgements derived from historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Revisions to accounting estimates are recognised in the period in which those estimates are revised and also in future periods that are affected by the revision. Judgements and assumptions made by management in applying Australian Accounting Standards that have significant effects on the financial statements and estimates are disclosed in the notes to which they relate.
These financial statements cover the department as an individual reporting entity and include all the activities of the department. The results of the portfolio entities are not consolidated in the department’s financial statements because they prepare their own financial reports. The department’s portfolio results (including the portfolio entities) are included in Appendix 1: Budget portfolio outcomes of the Annual Report which does not form part of the financial statements and is not subject to audit by the Victorian Auditor-General’s Office.
Pursuant to section 53(1)(b) of the Financial Management Act, the results of the following entities are reported in aggregate as part of the department’s financial statements:
- Victorian Independent Remuneration Tribunal was established on 20 March 2019 under the Victorian Independent Remuneration Tribunal and Improving Parliamentary Standards Act 2019. It is included in this report until 1 February 2024 when it was transferred to the Department of Treasury and Finance as part of machinery of government changes.
- Wage Inspectorate Victoria was established on 1 July 2021 under the Wage Theft Act 2020. It is included in this report until 1 February 2024, when it was transferred to the Department of Treasury and Finance as part of machinery of government changes.
- The Victorian Multicultural Commission was established under the Multicultural Victoria Act 2011. It is included in this report from 1 February 2024, when it was transferred from the Department of Families, Fairness and Housing as part of machinery of government
The administered activities of the department and for the above entities are separately disclosed in Note 8.8 Administered items. The department remains accountable for administered items but does not recognise these in its financial statements.
Compliance information
These general-purpose financial statements have been prepared on a going concern basis in accordance with the Financial Management Act and applicable Australian Accounting Standards including interpretations issued by the AASB. They are presented in a manner consistent with the requirements of AASB 1049 Whole of Government and General Government Sector Financial Reporting.
Where appropriate, those Australian Accounting Standards paragraphs applicable to not-for-profit entities have been applied. Accounting policies selected and applied in these financial statements ensure the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring the substance of the underlying transactions or other events is reported.
Machinery of government changes
Transfers of net assets arising from administrative restructurings are treated as distributions to or contributions by owners. Transfers of net liabilities arising from administrative restructurings are treated as distributions to owners. In October 2023, the government issued an administrative order under section 3 of the Administrative Arrangements Act restructuring some of its activities via machinery of government changes which had an impact on the department. Subsequently, section 28(1) and section 30 of the Public Administration Act 2004 effected specific employees and function transfers. The financial impact of the transfer on categories of assets and liabilities is detailed in Note 8.6. The statement of changes in equity, cash flow statement, summary of annual appropriations (Note 2.1.1), reconciliation of movements in the carrying amount of property, plant and equipment (Note 5.1.1), and trust account balances (Note 7.5) show these impacts as line items.
Rounding of amounts
All amounts in the financial statements have been rounded to the nearest $1,000 unless otherwise stated. Figures in the financial statements may not equate due to rounding.
Other accounting policies
Significant accounting policies that summarise recognition and measurement basis used and relevant to an understanding of these financial statements, are provided throughout the notes to the financial statements.
Introduction
The role of the department is to work for the people of Victoria by leading the public service and supporting the government of the day to achieve its strategic objectives.
To deliver on these strategic objectives, the department receives income predominantly in the form of parliamentary appropriations.
Structure of this section
2.1 Income that funds the delivery of services
2.2 Summary of compliance with annual parliamentary appropriations
Key accounting recognition and measurement criteria
The revenue items that have specific recognition criteria are further described in Note 2.1. Where applicable, amounts disclosed as income are net of returns, allowances, duties and taxes. Amounts of income where the department does not have control are separately disclosed as administered income (see Note 8.8 Administered items).
2.1 Income that funds the delivery of services
Notes 2024
$’000
2023
$’000
Output appropriations 2.2.1 374,692 562,989 Special appropriations 2.2.2 79,282 141,147 Total appropriations 453,974 704,136 General purpose grants - 6,621 Specific purpose grants for on-passing 14,937 12,328 Total grants 14,937 18,949 Resources received free of charge 11,673 7,460 Other income 1,678 2,057 Total other income 13,351 9,517 Total income from transactions 482,262 732,602 Appropriations
Once annual parliamentary appropriations are approved by the Treasurer, they become controlled by the department and are recognised as income when applied for the purposes defined under the relevant legislation governing the use of the appropriation.
The department receives the following forms of appropriation:
- Output appropriations — Income for the outputs (i.e. services) the department provides to the government is recognised when those outputs have been delivered and the relevant minister has certified delivery of those outputs in accordance with specified performance criteria.
- Special appropriations — Income related to special appropriations are recognised when theexpenditure relating to the amounts appropriated are paid by the department.
Grants
The department has determined that the operating grant income included in the table above is earned as per AASB 1058 Income of Not-for-Profit Entities under arrangements that are either not enforceable or without any sufficiently specific performance obligations. This is recognised when the department has an unconditional right to receive cash, which usually coincides with receipt of cash.
Income from capital grants received from other government entities for developing and constructing an asset are recognised progressively as and when those assets are constructed. This aligns with the department’s obligation to construct the asset. The progressive percentage costs incurred is used to recognise income because this closely reflects the income earned by the department
in constructing the asset.Income received from the Commonwealth Government as specific purpose grants for
on-passing to other entities is recognised simultaneously as income and expenditure because the funds are immediately on passed to the relevant recipient entities on receipt.Resources received free of charge
Resources received free of charge or for nominal consideration are recognised at fair value when control is obtained over them, irrespective of whether these contributions are subject to restrictions or conditions over their use.
The department’s resources received free of charge relates to corporate support services received from the Department of Government Services.
Other income
Other income arises from the following transactions and other miscellaneous income and recovery of administration costs.
- Trust fund income — Trust fund income mostly includes fees collected from the Aboriginal Cultural Heritage Register and income from other external parties.
- Sponsorship income — Sponsorship income includes receipts from external parties for the Australia Day Fund.
2.2 Summary of compliance with annual parliamentary and special appropriations
2.2.1 Summary of annual appropriations
The following table discloses the details of the various annual parliamentary appropriations the department received for the financial year.
In accordance with accrual output-based management procedures, ‘provision of outputs’ and ‘additions to net assets’ are disclosed as ‘controlled’ activities of the department. Administered transactions are those undertaken on behalf of the State over which the department has no control or discretion.
2024 controlled
Appropriations Act
Annual appropriation
$’000
Appropriations Act
Net transfers between departments — administrative restructure
$’000
Appropriations Act
Advance from Treasurer1
$’000
Financial Management Act
Section 292
$’000
Financial Management Act
Section 303
$’000
Financial Management Act
Section 324
$’000
Total parliamentary authority
$’000
Total appropriations applied
$’000
Variance5
$’000
2024 controlled Output appropriations 344,537 3,433 45,405 - (1,174) 9,468 401,669 374,692 26,977 Additions to net assets 1,000 - - - 1,174 - 2,174 - 2,174 2024 total 345,537 3,433 45,405 - - 9,468 403,843 374,692 29,151 2023 controlled
Appropriations Act
Annual appropriation
$’000
Appropriations Act
Net transfers between departments — administrative restructure
$’000
Appropriations Act
Advance from Treasurer1
$’000
Financial Management Act
Section 292
$’000
Financial Management Act
Section 303
$’000
Financial Management Act
Section 324
$’000
Total parliamentary authority
$’000
Total appropriations applied
$’000
Variance5
$’000
Output appropriations 489,424 (92,321) 229,240 423 (919) 9,404 635,251 562,989 72,262 Additions to net assets 13,254 (13,254) 225,000 - 919 - 225,919 225,919 - 2023 total 502,678 (105,575) 454,240 423 - 9,404 861,170 788,908 72,262 2.2.2 Summary of special appropriations
The following table discloses the details of compliance with special appropriations.
Controlled
Authority Purpose Appropriations applied 2024
$'000
Appropriations applied 2023
$'000
Constitution Act, No. 8750 of 1975 — Executive Council Salary for Clerk of the Executive Council 50 46 Constitution Act, No. 8750 of 1975 — Governor's salary Salary payments to the Governor of Victoria 472 500 Electoral Act, No. 23 of 2002 Operating costs incurred by the Victorian Electoral Commission 62,560 140,601 Treaty Authority and Other Treaty ElementsAct 2022, section 16 Operating costs incurred by the Treaty Authority 16,200 - Total controlled 79,282 141,147 Administered
Authority Purpose Appropriations applied 2024
$'000
Appropriations applied 2023
$'000
Inquiries Act, No. 67 of 2014, section 58 Expenses and financial obligations of Board of Inquiry 4,813 - Electoral Act, No. 23 of 2002 Electoral entitlements 15,636 18,330 Total administered 20,449 18,330 Capital - controlled
Authority Purpose Appropriations applied 2024
$'000
Appropriations applied 2023
$'000
Electoral Act, No. 23 of 2002 Capital costs incurred by the Victorian Electoral Commission 8,579 6,707 Total capital — controlled 8,579 6,707 Introduction
This section provides details of the expenses the department incurred in delivering its services.
The funds that enable the provision of services are disclosed in Note 2. In this section the costs associated with the provision of services are recorded.
Structure of this section
3.1 Expenses incurred in the delivery of services
Key accounting recognition and measurement criteria
- Expenses are ordinarily recognised in the comprehensive operating statement in the reporting period in which they are incurred, and the expense is paid or is payable.
- Certain items such as employee expenses and grant expenses that have specific recognition criteria are further described in Note 3.1.
3.1 Expenses incurred in the delivery of services
2024
$’000
2023
$’000
Specific purpose grants for on-passing6 84,031 207,755 Grant payments for other specific purposes7 129,371 145,664 Grant expenses 213,402 353,419 Salaries and wages, annual leave and long service leave 160,611 205,171 Termination benefits 9,490 10,089 Defined contribution superannuation expenses 15,124 19,450 Defined benefit superannuation expense 107 166 Employee expenses 185,332 234,876 Purchases of services and supplies 69,364 94,976 Information technology expenses 2,540 20,497 Marketing and promotion 5,266 8,932 Short-term lease expenses and low-value assets - 47 Office accommodation expenses 2,295 3,624 Other operating expenses 79,465 128,076 Grant expenses
Grant expenses are contributions of the department’s resources to other parties for specific or general purposes where there is no expectation that the amount will be repaid in equal value (either by goods or services). Grant expenses also include grants paid to entities within the department’s portfolio. These grants are reported in specific purpose grants for on passing.
Grants can either be operating or capital in nature. Grants can be paid as general-purpose grants, which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be paid as specific purpose grants, which are paid for a particular purpose and have conditions attached regarding their use.
Grant expenses are recognised in the reporting period in which they are paid or payable. Grants can take the form of money, assets, goods, or services.
This grant payments information is not subject to audit by the Victorian Auditor-General’s Office.
Employee expenses
Employee expenses comprise all costs related to employment including wages and salaries, superannuation, fringe benefits tax, leave entitlements, redundancy payments, WorkCover premiums and other on-costs.
The amount recognised in the comprehensive operating statement in relation to superannuation includes employer contributions for members of both defined benefit and defined contribution superannuation plans that are paid or payable during the reporting period.
Other operating expenses
Other operating expenses generally represent the day-to-day running costs incurred in normal operations and are recognised as expenses in the reporting period in which they are incurred.
Introduction
The department is predominantly funded by accrual-based parliamentary appropriations for providing outputs. This section provides a description of the departmental outputs delivered during the financial year and the costs incurred in delivering those outputs.
Structure of this section
4.1 Departmental outputs
4.2 Changes in departmental outputs
4.3 Departmental outputs — controlled income and controlled expenses
4.1 Departmental outputs
A description of the departmental outputs during the financial year ended 30 June 2024 and their objectives are summarised below.
Stronger policy outcomes for Victoria
The ‘Stronger policy outcomes for Victoria’ objective leads whole of government economic and social policy delivery and reform. It leads the public sector response to significant state and Commonwealth issues, policy challenges and projects. It delivers policies and programs that promote fairness, inclusion and participation of Victoria’s culturally diverse communities. It includes the outputs of Economic Policy Advice and Support; Social Policy Advice and Intergovernmental Relations; and Multicultural Affairs Policy and Programs.
First Peoples in Victoria are strong
and self-determiningThe ‘First Peoples in Victoria are strong and self-determining’ objective focuses on improving outcomes and services for First Peoples through prioritising actions to enable self-determination, including advancing Treaty, protecting and promoting cultural rights, recognising land and native title rights and responding to and engaging with the Yoorrook Justice Commission. It addresses trauma and supports healing; and stops systemic injustice. It provides culturally safe systems and services and transfers power and resources to communities. It includes outputs of Self-determination Policy and Reform Advice and Programs; and Traditional Owner Engagement and Cultural Heritage Management Programs.
Improved public administration and support for the Victorian public service
The ‘Improved public administration and support for the Victorian public service’ objective fosters and promotes a high-performing public service.
It ensures effective whole-of-government performance and outcomes and supports the effective administration of government. It protects and promotes the values of good governance, integrity and accountability across the public service to foster and maintain public trust in government. It maintains compliance with government advertising and communication guidelines to support effective financial management probity, and accountability of government advertising. It includes the outputs of Executive Government Advice and Services; Public Sector Administration Advice and Support; Chief Parliamentary Counsel Services; and State Electoral Roll and Electoral Events.4.2 Changes in departmental outputs
The machinery of government changes effective
1 February 2024 resulted in the transfer of the Industrial Relations output to the Department of Treasury and Finance and the transfer of the Multicultural Affairs Policy and Programs output from the Department of Families, Fairness and Housing to the department.4.3 Departmental outputs — controlled income and controlled expenses
Income from transactions
Stronger policy outcomes for Victoria8 2024
$’000
Stronger policy outcomes for Victoria 2023
$’000
First Peoples in Victoria are strong and self-determining 2024
$’000
First Peoples in Victoria are strong and self-determining 2023
$’000
Improved public administration and support for the Victorian public service 2024
$’000
Improved public administration and support for the Victorian public service 2023
$’000
Total 2024
$’000
Total 2023
$’000
Income from transactions Output appropriations 84,420 194,840 128,498 90,837 161,774 277,312 374,692 562,989 Special appropriations - - - - 79,282 141,147 79,282 141,147 Grants income 13,282 16,582 - - 1,655 2,366 14,937 18,949 Resources received free of charge - - 303 303 11,370 7,157 11,673 7,460 Other income 2 142 1,497 1,322 179 594 1,678 2,057 Total income from transactions 97,704 211,564 130,298 92,462 254,260 428,576 482,262 732,602 Expenses from transactions
Stronger policy outcomes for Victoria 2024
$’000
Stronger policy outcomes for Victoria 2023
$’000
First Peoples in Victoria are strong and self-determining 2024
$’000
First Peoples in Victoria are strong and self-determining 2023
$’000
Improved public administration and support for the Victorian public service 2024
$’000
Improved public administration and support for the Victorian public service 2023
$’000
Total 2024
$’000
Total 2023
$’000
Grants expenses 22,309 18,203 67,649 42,574 123,444 292,643 213,402 353,419 Employee expenses 52,231 106,651 37,717 28,782 95,384 99,443 185,332 234,876 Depreciation and amortisation 58 7,641 1,094 1,139 3,306 5,274 4,458 14,055 Interest expense 4 9 70 88 3 15 77 112 Other operating expenses 24,355 76,063 22,277 18,670 32,833 33,344 79,465 128,076 Total expenses from transactions 98,957 208,566 128,807 91,253 254,970 430,719 482,734 730,539 Net result from transactions (net operating balance) (1,253) 2,998 1,491 1,209 (710) (2,143) (472) 2,064 Other economic flows included in net result
Stronger policy outcomes for Victoria 2024
$’000
Stronger policy outcomes for Victoria 2023
$’000
First Peoples in Victoria are strong and self-determining 2024
$’000
First Peoples in Victoria are strong and self-determining 2023
$’000
Improved public administration and support for the Victorian public service 2024
$’000
Improved public administration and support for the Victorian public service 2023
$’000
Total 2024
$’000
Total 2023
$’000
Net gain/(loss) on non-financial assets 8 327 - 159 104 (170) 112 316 Other gains on other economic flows (21) 94 6 (17) 16 (29) 1 48 Total other economic flows included in net result (13) 421 6 143 120 (200) 113 364 Net result (1,266) 3,419 1,497 1,351 (590) (2,343) (359) 2,428 Comprehensive result (1,266) 3,419 1,497 1,351 (590) (2,343) (359) 2,428 Introduction
The department uses property, plant and equipment in fulfilling its objectives and conducting its output activities. These assets represent the key resources that the department uses for delivering output activities discussed in section 4 of these financial statements.
Structure of this section
5.1 Property, plant and equipment
5.2 Intangible assets
5.3 Depreciation and amortisation
5.4 Fair value determination
5.1 Property, plant and equipment
Key accounting recognition and measurement criteria
Items of property, plant and equipment are measured initially at cost. Where an asset is acquired for nominal cost, the cost is its fair value at the date of acquisition. Assets transferred from/to other departments as part of machinery of government changes are transferred at their carrying amount.
The cost of leasehold improvements is capitalised and depreciated over the shorter of the remaining lease term or estimated useful life.
The initial cost of leased motor vehicles is measured at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments determined at the inception of the lease.
Leases recognised as right-of-use assets are initially measured at cost. This represents the present value of expected future payments resulting from the lease contracts.
In reporting periods subsequent to initial recognition, property, plant and equipment are measured at fair value less accumulated depreciation and impairment. Fair value is determined based on the asset’s highest and best use (considering legal or physical restrictions imposed on the asset, public announcements or commitments made in relation to the intended use of the asset) and is summarised by asset category.
Total property, plant and equipment
Gross carrying amount 2024
$'000
Gross carrying amount 2023
$'000
Accumulated
depreciation 2024$'000
Accumulated
depreciation 2023$'000
Net carrying amount 2024
$'000
Net carrying amount 2023
$'000
Land9 170,851 170,851 - - 170,851 170,851 Buildings (including heritage buildings)10 82,007 82,310 (8,681) (4,920) 73,326 77,390 Building construction in progress 6,106 3,988 - - 6,106 3,988 Office equipment and computer equipment 5,670 5,924 (5,489) (5,647) 181 277 Plant and equipment works in progress 80 80 - - 80 80 Leased motor vehicles 2,312 2,089 (665) (701) 1,647 1,388 Other heritage assets11 8,282 8,282 (174) (87) 8,108 8,195 Net carrying amount 275,478 273,694 (15,179) (11,525) 260,299 262,169 Land and buildings (including heritage buildings)
Land and buildings are classified as specialised land and specialised buildings due to restrictions on the use of these assets. They are valued at fair value. For land valuation purposes, the market approach is used, although this is adjusted for any community service obligations to reflect the specialised nature of the land being valued. Buildings are valued using the current replacement cost method and some components of Government House are valued using reproduction cost method.
For more details on valuation techniques, inputs and processes, refer to Note 5.4.
Leasehold improvements
Leasehold improvements are valued using the historical cost method. Historical cost is used as a close proxy to the current replacement cost due to the short useful lives of these assets.
Office equipment and computer equipment
Office equipment and computer equipment are valued using the historical cost method. Historical cost is used as a close proxy to the current replacement cost due to the short useful lives of these assets.
Motor vehicles
Vehicles are valued using the current replacement cost method. The department acquires new vehicles 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 departmental fleet managers, who set relevant depreciation rates during the life of the asset to reflect the use of the vehicles.
Other heritage assets
These assets are reported at fair value using the market approach. The market approach compares the value of the assets with comparable assets that have sold in the marketplace.
For more details on valuation techniques, inputs, and processes, refer to Note 5.4.
Right-of-use assets acquired by lessees
The department recognises a right-of-use asset and a lease liability at the lease start date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for:
- any lease payments made at or before the start date less any lease incentive received
- any initial direct costs incurred
- an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located.
The department depreciates the right-of-use assets on a straight-line basis from the lease start date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The right-of-use assets are also subject to revaluation.
In addition, right-of-use assets are periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liabilities.
Refer to the table at 5.1.1 (a) for reconciliation of movements in carrying amounts of the department’s right-of-use assets.
5.1.1 Reconciliation of movements in carrying amount of property, plant and equipment
2024
Land at fair value
$'000
Buildings (including heritage buildings)12
$'000
Leasehold improvements
$'000
Construction in progress
$'000
Office equipment
and computer equipment$'000
Plant and equipment works in progress
$'000
Leased motor vehicles
$'000
Public records
$'000
Other heritage assets
$'000
Total
$'000
Carrying amount at the start of the year 170,851 77,389 - 3,988 277 80 1,388 - 8,195 262,168 Additions - - - 2,129 11 - 1,077 - - 3,218 Disposals - - - - - - (499) - - (499) Transfers between classes - - - (11) 11 - - - - - Fair value of assets provided free of charge or for nominal considerations - (303) - - - - - - - (303) Other administrative arrangements - - - - - - 7 - - 7 Depreciation/amortisation expense - (3,760) - - (118) - (327) - (87) (4,292) Carrying amount at the end of 2024 170,851 73,326 - 6,106 181 80 1,647 - 8,108 260,300 2023
Land at fair value
$'000
Buildings (including heritage buildings)12
$'000
Leasehold improvements13
$'000
Construction inprogress
$'000
Office equipment and computer equipment
$'000
Plant and equipment works in progress
$'000
Leased motor vehicles
$'000
Public records13
$'000
Other heritage assets
$'000
Total
$'000
Carrying amount at the start of the year 246,370 104,748 22,207 4,281 2,060 59 3,450 503,466 8,579 895,220 Additions - 89 - 2,544 66 143 552 - - 3,394 Disposals - - (3) (208) - - (154) - (18) (383) Transfers between classes - - - (8) 8 - - - - - Fair value of assets provided free of charge or for nominal considerations - (303) - - - - - - - (303) Other administrative arrangements (75,519) (22,155) (20,194) (2,621) (1,442) (122) (1,895) (503,466) (277) (627,691) Depreciation/amortisation expense - (4,990) (2,010) - (415) - (565) - (89) (8,069) Carrying amount at the end of 2023 170,851 77,389 - 3,988 277 80 1,388 - 8,195 262,168 5.1.1 (a) Reconciliation of movement in carrying amount of right-of-use assets: buildings and vehicles
The following table is a subset of buildings and leased motor vehicles included in Note 5.1.1 for right-of-use assets.
Buildings
$’000
Leased motor vehicles
$’000
Opening balance — 1 July 2023 2,167 1,388 Additions - 1,077 Disposals - (499) Fair value of assets provided free of charge or for nominal considerations (303) - Other administrative arrangements - 7 Depreciation (809) (327) Closing balance — 30 June 2024 1,055 1,646 Opening balance — 1 July 2022 3,574 3,450 Additions - 552 Disposals - (154) Fair value of assets provided free of charge or for nominal considerations (303) - Other administrative arrangements (75) (1,895) Depreciation (1,029) (565) Closing balance — 30 June 2023 2,167 1,388 5.2 Intangible assets
Key accounting recognition and measurement criteria
Purchased intangible assets are initially recognised at cost. Subsequently, intangible assets with finite useful lives are carried at cost less accumulated amortisation and accumulated impairment losses. Depreciation and amortisation begin when the assets are available for use — that is, when they are in the location and condition necessary for them to be capable of operating in the manner intended by management.
Internally generated intangible assets arising from development (or from the development phase of an internal project) are recognised if, and only if, all the following are demonstrated:
- there is an intention to complete the intangible asset for use or sale
- there is an ability to use or sell the intangible asset
- the intangible asset will generate probable future economic benefits
- there is availability of adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset
- there is an ability to measure reliably the expenditure attributable to the intangible asset during its development.
Internally generated intangible assets with finite useful lives, are amortised on a straight-line basis over their useful lives.
Intangible assets with indefinite useful lives (and intangible assets not yet available for use) are tested for impairment annually or whenever there is an indication that the asset may be impaired.
Capitalised software 2024
$’000
Capitalised software 2023
$’000
Intangibles under development 2024
$’000
Intangibles under development 2023
$’000
Total 2024
$’000
Total 2023
$’000
Opening balance of gross carrying amount 6,737 83,064 1,756 20,092 8,493 103,156 Additions - - 488 9,800 488 9,800 Other administrative arrangements - (76,327) - (28,136) - (104,463) Closing balance of gross carrying amount 6,737 6,737 2,244 1,756 8,981 8,493 Opening balance of accumulated amortisation (6,264) (58,915) - - (6,264) (58,915) Amortisation of intangible assets charged (165) (5,986) - - (165) (5,986) Other administrative arrangements - 58,637 - - - 58,637 Closing balance of accumulated amortisation (6,429) (6,264) - - (6,429) (6,264) Net book value at end of financial year 308 473 2,244 1,756 2,552 2,229 5.3 Depreciation and amortisation
2024
$’000
2023
$’000
Buildings (including heritage buildings) 3,760 4,990 Leasehold improvements - 2,010 Office equipment and computer equipment 118 415 Leased motor vehicles 328 565 Other heritage assets 87 89 Intangible assets 165 5,986 Total depreciation and amortisation 4,458 14,055 All buildings, office and computer equipment and other non-financial physical assets that have finite useful lives are depreciated and intangible assets are amortised over their useful lives.
Depreciation and amortisation are generally calculated on a straight-line basis, at rates that allocate the asset’s value less any estimated residual value, to its useful life. Depreciation and amortisation begin when the asset is first available for use in the location and condition necessary for it to be capable of operating in the manner intended by the department.
Useful life of assets
Typical current and prior year estimated useful lives for the different asset classes are included in the table below.
Useful life (years) Buildings 5–200 Leasehold improvements 5–20 Office equipment and computer equipment 3–20 Motor vehicles 5 Leased motor vehicles 2–3 Other heritage assets 99–100 Intangible assets 3–10 Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term. Where the department obtains ownership of the underlying leased asset or if the cost of the right-of-use asset reflects that the entity will exercise a purchase option, the entity depreciates the right-of-use asset over its useful life.
Impairment
Non-financial assets — including items of property, plant and equipment or intangible assets — are tested for impairment whenever there is an indication that the asset may be impaired.
The assets concerned are tested as to whether their carrying value exceeds their recoverable amount. Where an asset’s carrying value exceeds its recoverable amount, the difference is considered to be an impairment and is written off as an ‘other economic flow’ in the comprehensive operating statement, except to the extent that it can be offset against an asset revaluation surplus applicable to that class
of asset.The recoverable amount for most assets is measured at the higher of current replacement cost and fair value less costs to sell.
Assets subject to restriction on use
Heritage assets held by the department generally cannot be modified or disposed of unless ministerial approval is obtained.
5.4 Fair value determination
The department determines the policies and procedures for fair value measurements such as property, plant and equipment in accordance with the requirements of AASB 13 Fair Value Measurement and the relevant Financial Reporting Directions (FRD) issued by the Department of Treasury and Finance.
In determining fair values, a number of inputs are used. To increase consistency and comparability in the financial statements, these inputs are categorised into three levels, also known as the fair value hierarchy:
- Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities.
- Level 2 — valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3 — valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
Fair value measurement hierarchy
2024
Carrying amount
$’000
Level 1
$’000
Fair value measurement at end of reporting period using:
Level 2
$’000
Fair value measurement at end of reporting period using: Level 3
$’000
2024 Land at fair value 170,851 - - 170,851 Buildings at fair value 73,326 - - 73,326 Other heritage assets at fair value 8,108 - 8,108 - Office equipment and computer equipment 181 - - 181 Leased motor vehicles 1,647 - - 1,647 Total 254,113 - 8,108 246,005 2023
Carrying amount
$’000
Level 1
$’000
Fair value measurement at end of reporting period using: Level 2
$’000
Fair value measurement at end of reporting period using: Level 3
$’000
Buildings at fair value 77,390 - - 77,390 Other heritage assets at fair value 8,195 - 8,195 - Office equipment and computer equipment 277 - - 277 Leased motor vehicles 1,388 - - 1,388 Total 258,101 - 8,195 249,906 There have been no transfers between levels during the period.
The department determines whether transfers have occurred between levels in the hierarchy by reassessing the categorisation at the end of each reporting period (based on the lowest level input that is significant to the fair value measurement as a whole).
The Valuer-General Victoria (VGV) is the department’s independent valuation agency. The department engages VGV to carry out professional valuations on a five-year cycle. In the interim years the department, in conjunction with VGV, monitors changes in the fair value of each class of asset through relevant data sources to determine whether a revaluation is required. If a valuation is required, then the department will either carry out a managerial valuation or engage with VGV to value those asset classes.
In the current reporting period, a full revaluation is not required. The department conducted a fair value assessment using the regular indices for land and buildings from the VGV. Following the assessment and as per FRD 103, no managerial valuation adjustment was done due to the movement in fair value being less than 10 per cent.
The reconciliation of all movements of fair value assets is shown in the table at 5.1.1.
5.4.1 Valuation techniques, inputs
and processesLand and buildings (including heritage buildings)
The market approach is used to value land, although this is adjusted for any community service obligations to reflect the use of the land being valued.
The community service obligations adjustment reflects the valuer’s assessment of the impact of restrictions associated with an asset to the extent that it is equally applicable to market participants. This approach is in light of the highest and best use consideration required for fair value measurement. Relevant valuation factors include what is physically possible, legally permissible and financially feasible. Such adjustments of community service obligations are considered significant unobservable inputs; valuation of specialised land is classified at level 3 in the fair value measurement hierarchy.
For the department’s buildings, the current replacement cost method is used, adjusting for useful life and associated depreciation. Such adjustments are considered significant unobservable inputs; buildings are classified at level 3 in the fair value measurement hierarchy.
VGV performed an independent valuation of land and buildings. The effective date of the valuation was 30 June 2022.
Other heritage assets
Other heritage assets include artwork. For artwork, valuation of the assets is determined by a comparison to similar examples of the artist’s work in existence throughout Australia and research on recent prices paid for similar examples offered at auction or through art galleries.
These assets have been assessed with reference to similar assets and do not contain significant unobservable inputs. They are classified at level 2 in the fair value measurement hierarchy.
5.4.2 Description of significant unobservable inputs to level 3 valuations
2023 and 2024 Valuation technique Significant unobservableinputs Range Sensitivity of fair value measurement to
changes in significant unobservable inputsLand Market approach Direct cost per square metre $3,500/m2 A significant increase or decrease in direct cost per square metre adjustment would result in a significantly higher or lower fair value. Community service obligation (CSO) adjustment Government House — 60% reduction A significant increase or decrease in the CSO adjustment would result in a significantly higher or lower fair value. Buildings Current replacement cost Useful life of specialised buildings 5 to 200 years A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation. Office equipment and computer equipment Current replacement cost Cost per unit $4,000–$6,000,000
per unitA significant increase or decrease in the cost per unit would result in a significantly higher or lower fair value. Useful life of office equipment and computer equipment 3 to 20 years A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation. Leased motor vehicles Current replacement cost Cost per unit $25,000–$107,000
per unitA significant increase or decrease in the cost per unit would result in a significantly higher or lower fair value. Useful life of leased motor vehicles 2 to 3 years A significant increase or decrease in the estimated useful life of the asset would result in a significantly higher or lower valuation. Introduction
This section sets out the other assets and liabilities that arose from the department’s operations and help to contribute to the successful delivery of output operations.
Structure of this section
6.1 Receivables
6.2 Payables
6.3 Other non-financial assets
6.4 Employee benefits
6.5 Other provisions
Key accounting recognition and measurement criteria
Contractual receivables are classified as financial instruments and categorised as ‘financial assets at amortised cost’. They are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment.
The department currently holds financial instruments where the carrying amounts approximate to fair value due to their short-term nature or due to an expectation that they will be paid in full by the end of the 2024–25 reporting period.
Statutory receivables do not arise from contracts and are recognised and measured similarly to contractual receivables (except for impairment) but are not classified as financial instruments. Amounts recognised as receivable from the Victorian Government represent funding for all commitments incurred and are drawn from the Consolidated Fund when the commitments fall due.
Contractual payables are classified as financial instruments and measured at amortised cost. Accounts payable represent liabilities for goods and services provided to the department in the reporting period that are unpaid at the end of the reporting period.
Statutory payables are recognised and measured similarly to contractual payables but are not classified as financial instruments nor included in the category of financial liabilities at amortised cost because they do not arise from contracts.
6.1 Receivables
2024
$’000
2023
$’000
Contractual Receivables 24,660 4,632 Statutory Amounts owing from the Victorian Government14 91,969 47,226 GST recoverable 1,059 4,828 Total receivables 117,688 56,686 Represented by: Current receivables 113,833 52,927 Non-current receivables 3,855 3,759 6.1.1 Ageing analysis of contractual receivables
The average credit period for sales of goods/services and for other receivables is 30 days. There are no material financial assets that are individually determined to be impaired. Currently the department does not hold any collateral as security nor credit enhancements relating to any of its financial assets.
6.2 Payables
2024
$’000
2023
$’000
Contractual Supplies and services 71,102 5,319 Statutory Amounts payable to other government agencies 3,651 6,005 Total payables 74,753 11,324 Represented by: Current payables 74,753 11,324 6.3 Other non-financial assets
2024
$’000
2023
$’000
Prepayments 62 359 Other 80 119 Total other non-financial assets 142 478 Prepayments represent payments in advance of receiving goods or services made in one accounting period covering a term extending beyond that period. Prepayments at the end of the financial year include accommodation, software and information technology payments made in advance.
6.4 Employee benefits
Key accounting recognition and measurement criteria
Provision is made for benefits payable to employees in respect of annual leave and long service leave for services rendered up to the reporting date.
The annual leave liability is classified as a current liability and measured at the undiscounted amount expected to be paid, because the department does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.
No provision has been made for sick leave because all sick leave is non-vesting and it is not considered probable that the average sick leave taken in the future will be greater than the benefits accrued in future periods. Because sick leave is non-vesting, an expense is recognised in the comprehensive operating statement when sick leave is taken.
Unconditional long service leave is disclosed as a current liability, even where the department does not expect to settle the liability within 12 months because it will not have the unconditional right to defer the settlement of the entitlement should an employee take leave within 12 months.
The components of the current long service leave liability are measured at either:
- undiscounted value — if the department expects to wholly settle within 12 months
- present value — if the department does not expect to wholly settle within 12 months.
Conditional long service leave is disclosed as a non-current liability. There is a conditional right to defer the settlement of the entitlement until the employee has completed the requisite years of service. This non- current long service leave is measured at present value.
Any gain or loss following revaluation of the present value of the non-current long service leave liability is recognised in the comprehensive operating statement as a gain or loss from continuing operations, except to the extent that a gain or loss arises due to changes in bond interest rates for which it is then recognised as an ‘other economic flow’ in the net result.
Employment on-costs such as payroll tax, workers compensation and superannuation are disclosed separately as a component of the provision for employee benefits.
Current provisions
2024
$’000
2023
$’000
Annual leave Unconditional and expected to settle within 12 months 8,817 8,500 Unconditional and expected to settle after 12 months 4,058 5,101 Long service leave Unconditional and expected to settle within 12 months 1,782 1,450 Unconditional and expected to settle after 12 months 9,737 9,730 Provision for on-costs Unconditional and expected to settle within 12 months 2,034 2,934 Unconditional and expected to settle after 12 months 2,523 3,758 Total current provisions for employee benefits 28,951 31,473 Non-current provisions
2024
$’000
2023
$’000
Long service leave 3,279 3,176 Provision for on-costs 600 584 Total non-current provisions for employee benefits 3,879 3,760 Total provisions for employee benefits 32,830 35,233 The department does not recognise any superannuation fund defined benefit liabilities because it has no legal or constructive obligation to pay such future benefits to its employees. Instead, the Department of Treasury and Finance discloses in its annual financial statements the net defined benefit cost related to the members of these plans as an administered liability (on behalf of the State as the sponsoring employer).
6.5 Other provisions
2024
$’000
2023
$’000
Performance incentive 2,420 2,469 Total other provisions 2,420 2,469 Other provisions are recognised when the department has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, considering the risks and uncertainties surrounding the obligation.
Introduction
This section provides information on thesources of financing activities of the department during the financial year.
This section also includes disclosures of balances that are classified as financial instruments (including cash balances) and additional information on managing exposures to financial risks.
Structure of this section
7.1 Borrowings
7.2 Cash balances and cash flow information
7.3 Financial instruments and financial risk management
7.4 Commitments for expenditure
7.5 Trust account balances
7.1 Borrowings
Key accounting recognition and measurement criteria
Borrowings are classified as financial instruments.
All interest-bearing borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. The measurement basis subsequent to initial recognition is at amortised cost. The classification depends on the nature and purpose of the interest-bearing liabilities. The department determines the classification of its interest-bearing liabilities at initial recognition.
Leases recognised under the AASB 16 Leases accounting standard are initially measured at the present value of the lease payments unpaid at the start date, discounted using an interest rate implicit in the lease if that rate is readily determinable or at the department’s incremental borrowing rate.
Interest expenses include costs incurred in connection with borrowing funds or the notional interest cost in leases recognised under the AASB 16 Leases accounting standard. Interest expenses are recognised in the period in which they are incurred.
2024
$’000
2023
$’000
Current borrowings Lease liabilities 1,123 1,259 Total current borrowings 1,123 1,259 Non-current borrowings Lease liabilities 1,734 2,403 Total non-current borrowings 1,734 2,403 Total borrowings 2,857 3,662 The department leases various properties and motor vehicles. The lease contracts are typically made for fixed periods of 2–20 years with an option to renew the lease after that date.
7.1.1 Right-of-use assets resulting from leases
Right-of-use assets are presented in Note 5.1.1 (a).
7.1.2 Amounts recognised in the comprehensive operating statement relating to leases
The following amounts are recognised in the comprehensive operating statement relating to leases.
2024
$’000
2023
$’000
Interest expense on lease liabilities 77 112 Expenses relating to short term leases and leases of low-value assets - 47 Total amount recognised in the comprehensive operating statement 77 159 7.1.3 Amounts recognised in the cash flow statement relating to leases
The following amounts are recognised in the cash flow statement relating to leases.
2024
$’000
2023
$’000
Total cash outflow for leases (1,899) (3,044) Leases
For any new contracts entered into, the department considers whether contracts contain leases. A lease is defined as a contract that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the department assesses whether the contract meets the following three key evaluations:
- whether the contract contains an identified asset that is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the department and for which the supplier does not have substantive substitution rights
- whether the department has the right to benefit from substantially all the economic benefits from using the asset throughout the contract period and has the right to direct the use of the asset throughout the contract period
- whether the department has the right to make decisions in respect of ‘how and for what purpose’ the asset is used throughout the contract period.
This policy is applied to contracts entered into, or changed, on or after 1 July 2019.
Separation of lease and non-lease components
At inception or on reassessment of a contract that contains a lease component, the lessee is required to account separately for non-lease components within the contract and exclude these amounts when determining the lease liability and right-of-use asset amount.
Recognition and measurement of leases as lessee
Lease payments included in the measurement of the lease liability comprise:
- fixed payments (including in-substance fixed payments) less any lease incentive receivable
- variable payments based on an index or rate, initially measured using the index or rate on the commencement date
- amounts expected to be payable under a residual value guarantee; and
- payments arising from purchase and termination options reasonably certain to be exercised.
Subsequent to initial measurement, the liability is reduced for payments made and increased for interest changes. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or in the comprehensive operating statement if the right-of-use asset is already reduced to zero.
Short-term leases and leases of low-value assets
The department has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in Comprehensive Operating Statement when the expenditure is incurred.
Presentation of right-of-use assets and lease liabilities
The department discloses right-of-use assets as ‘Property plant and equipment’. Lease liabilities are presented as ‘Borrowings’ in the balance sheet.
7.2 Cash balances and cash flow information
7.2.1 Cash balances
2024
$’000
2023
$’000
Cash at bank 31,323 29,874 Balance as per cash flow statement 31,323 29,874 Cash at bank includes deposits at call held at the bank and trust account balances held in the State’s bank account (‘public account’). Cash received by the department is paid into the public account. Similarly, expenditure for payments to suppliers and creditors are made via the public account. The public account remits to the department the cash required based on payments to suppliers or creditors.
7.2.2 Reconciliation of the net result for the period to the cash flow from operating activities
2024
$’000
2023
$’000
Net result for the period (359) 2,428 Non-cash movements Depreciation and amortisation 4,458 14,055 (Gain) on disposal of non-financial assets (112) (316) Net transfers free of charge (303) (303) Total non-cash movements 4,043 13,436 Movements in assets and liabilities (net of restructuring) Increase in receivables (63,492) (3,409) Decrease in other non-financial assets 259 1,348 Increase in payables 63,476 7,124 Increase/(decrease) in employee benefits 117 (3,324) (Decrease) in other provisions (49) (541) Total movements in assets and liabilities 311 1,198 Net cash flows from operating activities 3,995 17,062 7.3 Financial instruments and financial risk management
Key accounting recognition and measurement criteria
Introduction
Financial instruments arise out of contractual agreements between entities that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Due to the nature of the department’s activities, certain assets and liabilities arise under statute rather than a contract. Such assets and liabilities do not meet the definition of financial instruments in AASB 132 Financial Instruments: Presentation.
The department applies AASB 9 Financial Instruments and classifies all financial assets based on the business model for managing the assets and the assets’ contractual terms.
Financial assets at amortised cost
Financial assets are measured at amortised cost. These assets are initially recognised at fair value plus any directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method less any impairment.
Financial assets at amortised cost include the department’s cash and deposits and trade receivables, but not statutory receivables.
Financial liabilities at amortised cost
Financial liabilities are initially recognised on the date they are originated. They are initially measured at fair value plus any directly attributable transaction costs. After initial measurement, these financial instruments are measured at amortised cost using the effective interest method.
Financial liabilities measured at amortised cost include all the department’s contractual payables and lease liabilities (borrowings).
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the asset have expired.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled, or when it expires.
Offsetting financial instruments
Financial instrument assets and liabilities are offset and the net amount disclosed in the balance sheet when, and only when, there is a legal right to offset the amounts and the department intends to settle on a net basis or to realise the asset and settle the liability simultaneously.
Categories of financial assets and liabilities
The following table shows the department’s categorisation of financial assets and financial liabilities:
2024
Financial assets at amortised cost
$’000
Financial liabilities at amortised cost
$’000
Total
$’000
Contractual financial assets Cash and deposits 31,323 - 31,323 Receivables 24,660 - 24,660 Total contractual financial assets in 2024 55,983 - 55,983 Financial liabilities Payables - 71,102 71,102 Lease liabilities - 2,857 2,857 Total contractual financial liabilities in 2024 - 73,959 73,959 2023
Financial assets at amortised cost
$’000
Financial liabilities at amortised cost
$’000
Total
$’000
Contractual financial assets Cash and deposits 29,874 - 29,874 Receivables 4,632 - 4,632 Total contractual financial assets in 2023 34,506 - 34,506 Financial liabilities Payables - 5,319 5,319 Lease liabilities - 3,662 3,662 Total contractual financial liabilities in 2023 - 8,981 8,981 The department’s main financial risks include credit risk, liquidity risk and market risk:
Credit risk — Credit risk refers to the possibility that a debtor will default on its financial obligations as and when they fall due. Credit risk associated with the department’s contractual financial assets is minimal because the main debtors are other Victorian Government entities. Credit risk is measured at fair value and is monitored on a regular basis.
Considering the minimal credit risk, there is no expected credit loss for contractual receivables as per AASB 9 Financial Instruments expected credit loss approach.
Liquidity risk — Liquidity risk arises when the department cannot meet its financial obligations as they fall due. The department’s exposure to liquidity risk is deemed insignificant based on a current assessment of risk.
The department is exposed to liquidity risk mainly through the financial liabilities as disclosed in the balance sheet. The department manages its liquidity risk by:
- maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet its short-term obligations
- careful maturity planning of its financial obligations based on forecasts of future cash flows.
Market risk — The department’s exposure to market risk is primarily through interest rate risk. The department has no material exposure to foreign currency and other price risks.
Interest rate risk — The department’s exposure to interest rate risk is insignificant and arises primarily through the department's lease liabilities. The department manages the risk by undertaking interest-bearing liabilities, which are motor vehicles and accommodation leases under fixed-rate contracts.
7.4 Commitments for expenditure
Commitments for future expenditure include operating and capital commitments arising from contracts. These commitments are recorded at their nominal value and include GST. Where it is considered appropriate and provides relevant information to users, the net present values of significant individual projects are stated.
These future expenditures cease to be disclosed as commitments once the related liabilities are recognised in the balance sheet.
2024
Nominal amounts Less than 1 year
$’000
1–5 years
$’000
Total
$’000
Capital commitments 1,377 - 1,377 Other commitments 5,586 1,714 7,300 Total commitments (inclusive of GST) 6,963 1,714 8,677 Less GST recoverable (633) (156) (789) Total commitments (exclusive of GST) in 2024 6,330 1,558 7,888 2023
Nominal amounts Less than 1 year
$’000
1–5 years
$’000
Total
$’000
Capital commitments 1,250 - 1,250 Other commitments 5,110 44 5,154 Total commitments (inclusive of GST) 6,360 44 6,404 Less GST recoverable (578) (4) (582) Total commitments (exclusive of GST) in 2023 5,782 40 5,822 The department also has grant payment commitments. These commitments are unquantifiable since final grant payments to recipients are based on the achievement of performance milestones that may or may not be met and will affect the payment of those grants.
7.5 Trust account balances
2024
Cash and cash equivalents and investments Opening balance as at 1 July 2023
$’000
Total receipts
$’000
Total payments
$’000
MoG transfers15
$’000
Closing balance as at 30 June 2024
$’000
Controlled trusts Australia Day Committee Victoria Trust 511 417 (686) - 242 Departmental Trust Account 384 - - - 384 Treasury Trust16 8,325 535 (622) 368 8,606 Vehicle Lease Trust 1,987 134 (23) - 2,098 Information Victoria Working Account 17 - - - 17 Aboriginal Cultural Heritage Fund 4,240 1,438 (6) - 5,672 Intergovernmental Trust17 14,409 8,766 (9,259) 387 14,303 Total controlled trusts 29,874 11,290 (10,596) 756 31,323 2023
Cash and cash equivalents and investments Opening balance as at 1 July 2022
$’000
Total receipts
$’000
Total payments
$’000
Increase/
(Decrease) in Funds$’000
MoG transfer
$’000
Closing balance as at 30 June 2023
$’000
Controlled trusts Australia Day Committee Victoria Trust 237 1,154 (880) 274 - 511 Departmental Trust Account 1,826 2,288 (3,233) (946) (496) 384 Treasury Trust 24,533 11,844 (8,559) 3,285 (19,493) 8,325 Vehicle Lease Trust 1,907 177 - 177 (96) 1,987 Information Victoria Working Account 567 38 (177) (139) (411) 17 Aboriginal Cultural Heritage Fund 3,070 1,322 (152) 1,170 - 4,240 Intergovernmental Trust 23,216 12,692 (14,425) (1,733) (7,074) 14,409 Total controlled trusts 55,356 29,514 (27,427) 2,088 (27,570) 29,874 The department has trust account balances relating to trust accounts that are controlled and/or administered. Trust accounts controlled by the department are shown above. These trust balances are reported as cash at bank in Note 7.2.1. Administered trusts are disclosed in Note 8.8.
Introduction
This section includes additional disclosures required by accounting standards or otherwise for the understanding of this financial report. It also provides information on administered items.
Structure of this section
8.1 Other economic flows
8.2 Responsible persons
8.3 Executive remuneration
8.4 Related parties
8.5 Remuneration of auditors
8.6 Restructuring of administrative arrangements
8.7 Contingent assets and contingent liabilities
8.8 Administered items
8.9 Other accounting policies and Australian Accounting Standards issued but not yet effective
8.10 Subsequent events
8.1 Other economic flows
Other economic flows are changes in the value of an asset or liability that do not result from transactions. Gains/(losses) from other economic flows include the gains or losses from:
- the disposal of leased motor vehicles
- impairments of non-current physical and intangible assets
- the revaluation of the present value of the long service and recreational leave liability dueto changes in the bond interest rate.
Other economic flows 2024
$’000
2023
$’000
Net gain on non-financial assets Gain on disposal of leased motor vehicles 112 316 Total net gain/(loss) on non-financial assets 112 316 Other gains on other economic flows Gain on revaluation of recreational leave liability 11 5 Gain on revaluation of long service leave liability (10) 43 Total other gains on other economic flows 1 48 8.2 Responsible persons
In keeping with the Ministerial Directions issued by the Assistant Treasurer under the Financial Management Act, the following disclosures are made regarding responsible persons for the reporting period.
Names
The people who held the position of Minister and Accountable Officer in the department (from 1 July 2023 to 30 June 2024 unless otherwise stated) were:
Name of Minister or Accountable Officer Relevant title The Hon Daniel Andrews MP Premier (until 27 September 2023) Hon Jacinta Allan MP Deputy Premier (until 27 September 2023) Hon Jacinta Allan MP Premier (from 27 September 2023) The Hon Ben Carroll MP Deputy Premier (from 27 September 2023) Gabrielle Williams MP Minister for Treaty and First Peoples (until 2 October 2023) The Hon Natalie Hutchins MP Minister for Treaty and First Peoples (from 2 October 2023) Tim Pallas MP Minister for Industrial Relations (until machinery of government change on 1 February 2024) Ingrid Stitt MP Minister for Multicultural Affairs (from machinery of government change on 1 February 2024) Jeremi Moule Secretary The people who acted in positions of Minister and Accountable Officer in the department (from 1 July 2023 to 30 June 2024) were:
Name of Minister or Accountable Officer Relevant office Persons who acted in the positions The Hon Daniel Andrews MP Office of the Premier Hon Jacinta Allan MP Hon Jacinta Allan MP Office of the Premier The Hon Ben Carroll MP Gabrielle Williams MP Office of the Minister for Treaty and First Peoples The Hon Colin Brooks MP The Hon Natalie Hutchins MP Office of the Minister for Treaty and First Peoples Ingrid Stitt MP
The Hon Lizzie Blandthorn MP
The Hon Vicki Ward MP
The Hon Harriet Shing MP
Tim Pallas MP Office of the Minister for Industrial Relations The Hon Danny Pearson MP Ingrid Stitt MP Office of the Minister for Multicultural Affairs The Hon Mary-Anne Thomas MP Jeremi Moule Office of the Secretary Emma Cassar
Jason Loos
Jenny Atta
Remuneration
Remuneration received or receivable by the Accountable Officer in connection with managing the department during the reporting period was in the range of $740,000 to $749,999 (2023: $670,000 to $679,999).
8.3 Executive remuneration
The number of executive officers, other than ministers and accountable officers, and their total remuneration during the reporting period are shown in the table below. Total annualised employee equivalents provide a measure of full-time-equivalent executive officers over the reporting period.
Remuneration comprises employee benefits in all forms of consideration paid, payable or provided by the department or on behalf of the department, in exchange for services rendered, and is disclosed in the following categories:
- short-term employee benefits include amounts such as wages, salaries, annual leave or sick leave that are usually paid or payable on a regular basis, as well as non-monetary benefits such as allowances and free or subsidised goods or services
- post-employment benefits include pensions and other retirement benefits paid or payable on a discrete basis when employment hasceased
- other long-term benefits include long service leave, other long-service benefits or deferredcompensation
- termination benefits include termination of employment payments.
Remuneration of executive officers18 2024
$’000
2023
$’000
Short-term employee benefits 16,268 20,659 Post-employment benefits 1,741 2,137 Other long-term benefits 299 330 Termination benefits 188 142 Total remuneration 18,496 23,268 Total number of executives19, 20 99 134 Total annualised employee equivalents21 71.1 90.8 8.4 Related parties
The department is a wholly owned and controlled entity of the State.
The following agencies have been consolidated into the department’s financial statements pursuant to the determination made by the Assistant Treasurer under section 53(1)(b) of the Financial Management Act:
- Victorian Independent Remuneration Tribunal — until 1 February 2024
- Wage Inspectorate Victoria — until 1 February 2024
- Victorian Multicultural Commission — from 1 February 2024.
Related parties of the department, the Victorian Independent Remuneration Tribunal, the Wage Inspectorate Victoria, and the Victorian Multicultural Commission include:
- all key management personnel and their close family members and personal business interests (controlled entities, joint ventures and entities they have significant influence over)
- all Cabinet ministers and their close family members
- all departments and public sector entities that are controlled and included in the whole-of-state consolidated financial statements.
All related party transactions have been entered into on an arm’s length basis.
Significant transactions with government-related entities
The department received funding from the Consolidated Fund totalling $454.0 million (2023: $704.1 million). Refer to Note 2.1 for details.
Key management personnel
The department’s key management personnel from 1 July 2023 to 30 June 2024 included:
The Premier
- Hon Jacinta Allan MP
(from 27 September 2023) - The Hon Daniel Andrews MP
(until 27 September 2023).
Portfolio Ministers
- Hon Jacinta Allan MP
(until 26 September 2023) - The Hon Ben Carroll MP
(from 27 September 2023) - The Hon Natalie Hutchins MP
(from 2 October 2023) - Gabrielle Williams MP (until 2 October 2023)
- Tim Pallas MP (until 1 February 2024)
- Ingrid Stitt MP (from 1 February 2024).
Secretary
- Jeremi Moule.
Deputy Secretaries
- Brigid Sunderland
- Terry Garwood PSM
- Jason Loos PSM
- Joshua Puls MVO
- Jeroen Weimar
- Emma Cassar PSM
- Elly Patira
- Matt O’Connor.
Administrative Offices
Key management personnel of the administrative offices included in the department’s financial statements and other statutory appointees that are material in terms of the department’s financial results include:
- Jonathan Burke — Official Secretary for Office of the Governor.
The compensation detailed below excludes the salaries and benefits of portfolio ministers. Ministers’ remuneration and allowances are set by the Parliamentary Salaries and Superannuation Act 1968 and is reported in the State’s Annual Financial Report.
Department, administrative offices,
and section 53 entitiesCompensation of key management personnel 2024
$’000
2023
$’000
Short-term employee benefits 2,953 3,570 Post-employment benefits 201 268 Other long-term benefits 63 54 Termination benefits 207 59 Total 3,424 3,951 Transactions with key management personnel and other related parties
Given the breadth and depth of the State Government’s activities, related parties transact with the Victorian public sector on terms and conditions equivalent to those that prevail in arm’s-length transactions under the State’s procurement process. Further employment of processes within the Victorian public sector occurs on terms and conditions consistent with the Public Administration Act, 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 the department, there were no other related party transactions that involved key management personnel or their close family members. No provision has been required, nor any expense recognised, for impairment of receivables from related parties.
8.5 Remuneration of auditors
2024
$’000
2023
$’000
Victorian Auditor-General’s Office Audit of the annual financial statements 184 176 Total remuneration of auditors 184 176 8.6 Restructuring of administrative arrangements
Transfers out of the department
In October 2023 the government issued an administrative order under section 3 of the Administrative Arrangements Act to restructure some of its activities via machinery of government (‘MoG’) changes. As part of the restructure the department (the transferor) relinquished the following areas, taking effect on 1 February 2024:
- Industrial Relations Victoria, Victorian Independent Remuneration Tribunal (s53 entity), and Wage Inspectorate Victoria Authority (s53 entity) have transferred to the Department of Treasury and Finance (the transferee).
The following transfers from the department (the transferor) were based on the declaration pursuant to section 28 of the Public Administration Act, designated by the Premier, taking effect on 1 November 2023:
- Land and Precincts to the Department of Transport and Planning (the transferee).
- In addition, the Labour Hire Authority and the Portable Long Service Authority transferred from the department’s portfolio to the Department of Treasury and Finance, effective 1 February 2024.
Transfers into the department
The following transfers into the department (the transferee) were based on the administrative order under section 3 of the Administrative Arrangements Act, effective 1 February 2024:
- Multicultural Affairs and Victorian Multicultural Commission (s53 entity) from the Department of Families, Fairness and Housing (the transferor).
- In addition, VITS LanguageLoop was transferred into the department’s portfolio from the Department of Families, Fairness and Housing, effective 1 February 2024.
The table overleaf details the impact to net assets due to the administrative restructure, which has been recognised in the balance sheet at the carrying amount of those assets.
Restructuring of administrative arrangements during the year are as follows:
Transfers out:
Land and Precincts
$'000
Industrial Relations Victoria
$'000
Victorian Independent Remuneration Tribunal
$'000
Wage Inspectorate Victoria
$'000
Total
transfers out
$'000Assets Cash and deposits - (105) - - (105) Other non-financial assets - - - (77) (77) Receivables (537) (1,842) (402) (2,732) (5,513) Lease assets - (51) (17) (8) (76) Total assets (537) (1,998) (419) (2,817) (5,771) Liabilities Employee benefits 460 1,746 387 2,250 4,843 Payables 77 97 15 559 748 Lease liabilities - 50 17 8 75 Total liabilities 537 1,893 419 2,817 5,666 Net assets transferred23 - (105) - - (105) Transfers in
Victorian Multicultural Commission and Multicultural Affairs
$'000
Total
transfers in
$'000Assets Cash and deposits 860 860 Other non-financial assets - - Receivables 2,487 2,487 Lease assets 83 83 Total assets 3,430 3,430 Liabilities Employee benefits (1,862) (1,862) Payables (626) (626) Lease liabilities (83) (83) Total liabilities (2,570) (2,570) Net assets transferred22 860 860 8.7 Contingent assets and contingent liabilities
Key accounting recognition and measurement criteria
Contingent assets and contingent liabilities are not recognised in the balance sheet but are disclosed and, if quantifiable, measured at nominal value.
Contingent assets and liabilities are presented inclusive of GST.
Contingent assets are possible assets that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the department.
These are classified as either quantifiable, where the potential economic benefit is known, or non-quantifiable.
Contingent liabilities are:
- possible obligations that arise from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the department; or
- present obligations that arise from past events but are not recognised because:
- it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligations; or
- the amount of the obligations cannot be measured with sufficient reliability.
Contingent liabilities are also classified as either quantifiable or non-quantifiable.
Contingent liabilities
Quantifiable contingent liabilities
Contingent liabilities 2024
$’000
2023
$’000
Legal proceedings and disputes - 110 Total - 110 Non-quantifiable contingent liabilities — 2024 and 2023
First Peoples’ Assembly of Victoria
The State and the First Peoples’ Assembly of Victoria (‘the Assembly’) have established, by agreement, a novel entity called the Treaty Authority to oversee Treaty negotiations in Victoria. The State and the Assembly have jointly appointed a panel to select the members to be appointed to the Treaty Authority. The department has a potential contingent liability arising from the panel members.
The Treaty Authority panel members are not employed by the State or the Assembly, and nor is the panel a separate legal entity, meaning the panel members are not covered by the insurance policies of any existing entity. To mitigate any risks of panel members being personally liable for claims arising from their functions on the panel, the Minister for Treaty and First Peoples has agreed to provide ministerial indemnity to panel members as part of the Instrument of Appointment to appoint panellists.
It is not feasible at this time to quantify any future liability.
Native Title
A number of claims have been filed with the Federal Court under the Commonwealth Native Title Act 1993 that affect Victoria. It is not feasible at this time to quantify any future liability.
Contingent assets
There were no contingent assets as at the reporting date. (2023: nil).
8.8 Administered items
Key accounting recognition and measurement criteria
Administered transactions relating to income, assets and liabilities are determined on an accrual basis.
The transactions and balances below relate to administered items and are not included elsewhere in these financial statements because the department does not control these activities. However, the department remains accountable to the State for the transactions involving these administered resources even though it does not have the discretion to deploy these resources for its own benefit or
to achieve its objectives.The most significant transactions in this category include appropriations received and on-passed to the Victorian Electoral Commission for electoral entitlements, disposal of vehicles under leases, the Public Service Commuter Club and other Treasury and departmental trusts.
Administered (non-controlled) items 2024
$'000
2023
$'000
Administered Income from transactions Special appropriations 20,449 18,330 Provision of services - 55 Other income 254 542 Total administered income from transactions 20,703 18,927 Administered expenses from transactions Grants and other transfers 15,636 18,330 Supplies and services 3,277 7 Employee expenses 1,541 - Payments into the Consolidated Fund 249 595 Total administered expenses from transactions 20,703 18,932 Total administered comprehensive result - (5) Administered financial assets23 Cash24 9,770 45,776 Other receivables 146 125 Total administered financial assets 9,916 45,901 Total assets 9,916 45,901 Administered liabilities Amounts payable to other government agencies24 10,023 46,008 Total liabilities 10,023 46,008 Administered net assets (107) (107) Administered trust account balances
The table below provides additional information on individual administered trust account balances.
2024
Cash and cash equivalents andinvestments Opening balance as at 1 July 2023
$’000
Total receipts
$’000
Total payments
$’000
MoG transfers25
$’000
Closing balance as at 30 June 2024
$’000
Administered trusts Vehicle Lease Trust 18 - - - 18 Public Service Commuter Club26 (208) 91 (112) - (229) Departmental and Treasury trust accounts 10,964 16,899 (17,882) - 9,981 Labour Hire Authority Trust 35,001 4,063 (3,444) (35,620) - Total administered trusts 45,776 21,053 (21,438) (35,620) 9,770 2023
Cash and cash equivalents andinvestments Opening balance as at 1 July 2022
$’000
Total receipts
$’000
Total payments
$’000
MoG transfers
$’000
Closing balance as at 30 June 2023
$’000
Administered trusts Vehicle Lease Trust 18 - - - 18 Public Service Commuter Club27 (193) 145 (160) - (208) Departmental and Treasury trust accounts 6,441 46,084 (41,561) - 10,964 Labour Hire Authority Trust 25,175 10,228 (402) - 35,001 Total administered trusts 31,441 56,456 (42,122) - 45,776 8.9 Other accounting policies and Australian Accounting Standards issued but not yet effective
Other accounting policies — contributions by owners
In relation to machinery of government changes and consistent with the requirements of AASB 1004 Contributions, contributions by owners, contributed capital and its repayments are treated as equity transactions and do not form part of the department’s income and expenses.
Additions to net assets that have been designated as contributions by owners are recognised as contributed capital. Other transfers that are contributions to, or distributions by, owners are designated as contributions by owners.
Transfers of net assets or liabilities arising from administrative restructurings are treated as distributions to, or contributions by, owners.
Australian Accounting Standards issued but not yet effective
Certain new and revised accounting standards have been issued but are not effective for the 2023–24 reporting period. The following accounting standard has not been applied to the department’s financial statements.
AASB 2022-10 Amendments to Australian Accounting Standards — Fair Value Measurement of Non-Financial Assets of Not-for-Profit Public Sector Entities — AASB 2022-10 amends AASB 13 Fair Value Measurement by adding authoritative implementation for fair value measurements of non-financial assets of not-for-profit public sector entities not held primarily for their ability to generate net cash inflows.
Among other things, the standard:
- specifies that an entity needs to consider whether an asset’s highest and best use differs from its current use only when it is held for sale or held for distributions to owners under AASB 5 Non-current Assets Held for Sale and Discontinued Operations or if it is highly probable that it will be used for an alternative purpose
- clarifies that an asset’s use is ‘financially feasible’ if market participants would be willing to invest in the asset’s service capacity, considering both the capacity to provide needed goods or services and the resulting costs of those goods and services
- specifies that if both market selling price and some market participant data required to fair value the asset are not observable, an entity needs to start with its own assumptions and adjust them to the extent that reasonably available information indicates that other market participants would use different data
- provides guidance on the application of the cost approach to fair value, including the nature of costs to be included in a reference asset and identification of economic obsolescence.
This standard applies prospectively to annual periods beginning on or after 1 January 2024, with earlier application permitted. The department is currently in the process of assessing the potential impact of this standard and amendments.
A number of other standards and amendments have also been issued that apply to future reporting periods, however they are not expected to have any significant impact on the financial statements in the period of initial application.
8.10 Subsequent events
No significant events have occurred since 30 June 2024 that will have a material impact on the information disclosed in the financial statements (2023: Nil).
Notes
1The specific purpose of this supplementary funding has been disclosed in the State’s annual Financial Report. This funding has been fully applied in the current financial year.
2 The department is permitted under section 29 of the Financial Management Act to have certain income annotated to the annual appropriation. The department’s section 29 in the prior year related to Public Record Office of Victoria generating revenue from its reading room seminars, publications, and tenancy agreements until 31 December 2022.
3 Under section 30, the department may transfer an amount from one appropriation item to another in the current year. All expenses and obligations to which any section 30 transfer is applied must be reported in the financial year in which the transfer was made.
4 Section 32 constitutes the approved carryover of unapplied appropriations from the prior year to be applied against outputs in the current year.
5 Variances in output appropriations relate to unapplied appropriations for the outputs — Self-determination Policy and Reform Advice and Programs and Traditional Owner Engagement and Cultural Heritage Management Programs — that have been rephased and carried over from 2023–24 to 2024–25 for delivery next year.
6Payments to Victorian Government entities and other non–Victorian Government entities.
7 Payments to Victorian public non–financial corporations and other private businesses and individuals.
8 ‘Stronger policy outcomes for Victoria’ includes the impact of the transfer out of the Industrial Relations output and the transfer in of the Multicultural Affairs Policy and Programs output due to machinery of government changes effective from 1 February 2024.
9 Land at Government House was valued by the Valuer-General of Victoria as of 30 June 2022. The department does not hold any other land.
10 Buildings at Government House were valued by the Valuer-General of Victoria as of 30 June 2022. The department does not hold any other buildings.
11 Other heritage assets at Government House were valued by the Valuer-General of Victoria as of 30 June 2022. The department does not hold any other heritage assets.
12 This includes right-of-use assets relating to accommodation leases of the department (refer Note 5.1.1 (a) for further details.)
13 Carrying amount at the start of the 2022–23 financial year included public records and leasehold improvements which were transferred out of the department effective from 1 January 2023.
14Represents the balance of available appropriations relating to providing outputs as well as funds available for capital purchases for which payments had not been disbursed at the balance date and accordingly had not been drawn from the Consolidated Fund.
15 This relates to trusts transferred in and out of the department due to administrative restructures. Refer to Note 8.6 for details.
16 The Treasury trust was established under the Financial Management Act to record the receipt and disbursement of unclaimed monies and other funds held in trust.
17 The Intergovernmental Trust was established under section 19 of the Financial Management Act to record projects managed through interdepartmental fund transfers when no other trust arrangement exists.
18 The 2023 comparatives have been adjusted to exclude statutory officers and Administrative Office Heads and termination benefits to align with disclosure requirements of FRD 21.
19 The total number of executive officers includes people who met the definition of key management personnel of the entity under AASB 124 Related Party Disclosures and are also reported within the related parties note disclosure (Note 8.4).
20 The number of executives has decreased because of machinery of government changes that transferred out material functions in 2022–23 effective from 1 January 2023.
21 Annualised employee equivalent is based on the time fraction worked over the reporting period.
22 The net assets (liabilities) transferred were treated as a transfer of contributed capital provided by the State.
23 The State’s investment in its controlled entities is disclosed in the administered note of the Department of Treasury and Finance’s financial statements. This includes the investment in the department’s portfolio entities.
24 This includes funds in trust for the portfolio agencies held in the State’s public account.
25 This relates to Labour Hire Authority trusts transferred to the Department of Treasury and Finance due to administrative restructures taking effect on 1 February 2024.
27 This relates to timing of an upfront payment to Public Transport Victoria and receipt of amounts associated with the scheme by deductions from club members’ salaries
Updated