AGRICULTURE, Fisheries and FORESTRY Portfolio

PORTFOLIO BUDGET STATEMENTS 2011–12 BUDGET RELATED PAPER NO. 1.1

AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO [Click and type header]

BUDGET INITIATIVES AND EXPLANATIONS OF APPROPRIATIONS SPECIFIED BY OUTCOMES AND PROGRAMS BY AGENCY

2 ISBN 978 1743 023471

With the exception of the Commonwealth Coat of Arms and where otherwise noted all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia (http://creativecommons.org/licenses/by/3.0/au/) licence.

The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided) as is the full legal code for the CC BY 3.0 AU licence (http://creativecommons.org/licenses/by/3.0/au/legalcode).

The document must be attributed as the Agriculture, Fisheries and Forestry Portfolio Budget Statements 2011–12.

Printed by Canprint Communications Pty Ltd, Canberra SENATOR THE HON. JOE LUDWIG PARLIAMENT HOUSE CANBERRA 2600 President of the Senate Australian Senate Parliament House CANBERRA ACT 2600

Speaker House of Representatives Parliament House CANBERRA ACT 2600

Dear Mr President Dear Mr Speaker

I hereby submit Portfolio Budget Statements in support of the 2011–12 Budget for the Agriculture, Fisheries and Forestry portfolio.

These statements have been developed, and are submitted to the Parliament, as a statement on the outcomes for the portfolio.

I present these statements to provide accountability to the Parliament and, through it, the public.

Yours sincerely

Joe Ludwig Abbreviations and conventions The following notation may be used:

NEC/nec not elsewhere classified nil .. not zero, but rounded to zero na not applicable (unless otherwise specified) nfp not for publication $m $ million $b $ billion

Figures in tables and in the text may be rounded. Figures in text are generally rounded to one decimal place, whereas figures in tables are generally rounded to the nearest thousand. Discrepancies in tables between totals and sums of components are due to rounding.

Enquiries Should you have any enquiries regarding this publication please contact the Corporate Finance Division of the Department of Agriculture, Fisheries and Forestry on (02) 6272 3933.

A copy of this document can be located on the Australian Government Budget website at: http://www.budget.gov.au.

v User Guide to the Portfolio Budget Statements

vi USER GUIDE

The purpose of the 2011–12 Portfolio Budget Statements (PB Statements) is to inform Senators and Members of Parliament of the proposed allocation of resources to government outcomes by agencies within the portfolio. Agencies receive resources from the annual appropriations acts, special appropriations (including standing appropriations and special accounts), and revenue from other sources.

A key role of the PB Statements is to facilitate the understanding of proposed annual appropriations in Appropriation Bills No. 1 and No. 2 2011–12. In this sense the PB Statements are Budget related papers and are declared by the Appropriation Acts to be ‘relevant documents’ to the interpretation of the Acts according to section 15AB of the Acts Interpretation Act 1901.

The PB Statements provide information, explanation and justification to enable Parliament to understand the purpose of each outcome proposed in the Bills.

As required under section 12 of the Charter of Budget Honesty Act 1998, non-general government sector entities are not consolidated into the Commonwealth general government sector fiscal estimates and accordingly, these entities are not reported in the PB Statements.

vii CONTENTS

Portfolio Overview 1 Agriculture, Fisheries and Forestry 3

Agency Resources and Planned Performance 7 Department of Agriculture, Fisheries and Forestry 9 Cotton Research and Development Corporation 87 Fisheries Research and Development Corporation 103 Grains Research and Development Corporation 123 Grape and Wine Research and Development Corporation143 Rural Industries Research and Development Corporation 161 Sugar Research and Development Corporation 177 Wine Australia Corporation 197 Australian Fisheries Management Authority 215 Australian Pesticides and Veterinary Medicines Authority 237 Wheat Exports Australia 257

Portfolio Glossary 273

viii Portfolio Overview AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO OVERVIEW

Minister and portfolio responsibilities

The Agriculture, Fisheries and Forestry portfolio aims to enhance the sustainability, profitability and competitiveness of Australia’s agriculture, food, fisheries and forestry industries. The Minister and the Parliamentary Secretary for Agriculture, Fisheries and Forestry oversee the portfolio.

From 1 July 2011 the portfolio is expected to consist of:

• The Australian Government Department of Agriculture, Fisheries and Forestry (DAFF).

• Three prescribed agencies under the Financial Management and Accountability Act 1997 (FMA Act):

– Australian Fisheries Management Authority

– Australian Pesticides and Veterinary Medicines Authority

– Wheat Exports Australia

• One statutory marketing authority:

– Wine Australia Corporation

• Six Research and Development Corporations

– Cotton, Fisheries, Grains, Grape and Wine, Rural Industries and Sugar.

The Australian Fisheries Management Authority, the Australian Pesticides and Veterinary Medicines Authority and Wheat Exports Australia also undertake regulatory roles.

Each agency within the portfolio has at least one outcome and program. Details are provided in each agency’s section of this document.

2 Portfolio Overview

Figure 1: Agriculture, Fisheries and Forestry portfolio structure and outcomes

Minister for Agriculture, Fisheries and Forestry Senator the Hon. Joe Ludwig

Parliamentary Secretary for Agriculture, Fisheries and Forestry The Hon. Dr Mike Kelly AM MP

Australian Government Department of Agriculture, Fisheries and Forestry Secretary: Dr Conall O’Connell

Australian Fisheries Management Authority Fisheries Research and Development Corporation Chief Executive Officer: Dr James Findlay Executive Director: Dr Patrick Hone Outcome: Ecologically sustainable and economically efficient Outcome: Increased knowledge that fosters sustainable Commonwealth fisheries, through understanding and economic, environmental and social benefits for the monitoring Australia’s marine living resources and regulating Australian fishing industry; including indigenous, and monitoring commercial fishing, including domestic recreational, commercial and aquaculture sectors, and licensing and deterrence of illegal foreign fishing. the community; through investing in research, development and adoption.

Australian Pesticides and Veterinary Medicines Authority Grains Research and Development Corporation Chief Executive Officer: Dr Eva Bennet-Jenkins Managing Director: Mr John Harvey Outcome: Protection of the health and safety of people, Outcome: New information and products that enhance animals, the environment, and agricultural and livestock the productivity, competitiveness and environmental industries through regulation of pesticides and veterinary sustainability of Australian grain growers and benefit the medicines. industry and wider community, through planning, managing and implementing investments in grains research and development.

Wheat Exports Australia Chief Executive Officer: Mr Peter Woods Grape and Wine Research and Development Outcome: A bulk wheat export market with multiple exporters Corporation providing more choice for growers, through administration of Executive Director: Mr Neil Fisher the Wheat Export Accreditation Scheme. Outcome: The generation of new information that enhances the profitability, international competitiveness and sustainability of the Australian wine industry through investment in research and development.

Wine Australia Corporation Chief Executive Officer: Mr Andrew Cheesman Outcome: Enhancement of the operating environment of the Australian wine industry through providing the leading role in; Rural Industries Research and Development market development, knowledge development, compliance Corporation and trade. Managing Director: Mr Craig Burns Outcome: Increased knowledge that fosters sustainable, productive and profitable new and existing rural industries and furthers understanding of national rural issues through research and development in government-industry partnership. Cotton Research and Development Corporation Executive Director: Mr Bruce Finney Outcome: Adoption of innovation that leads to increased productivity, competitiveness and environmental sustainability through investment in research and development that benefits Sugar Research and Development Corporation the Australian cotton industry and the wider community. Executive Director: Ms Annette Sugden Outcome: A profitable, sustainable and internationally competitive Australian sugarcane industry providing economic, environmental and social benefits for rural and regional communities through targeted investment in research and development.

3 Portfolio Overview

PORTFOLIO RESOURCES

Table 1 shows the total new resources provided to the portfolio in the 2011–12 budget year, by agency.

Table 1: Portfolio resources 2011–12 Appropriation Special Receipts Total Bill No. 1 Bill No. 2 Special accounts $'000 $'000 $'000 $'000 $'000 $'000 Departm ent of Agriculture, Fisheries Administered appropriations 164,367 - 618,203 - - 782,570 Departmental appropriations 308,526 14,169 - 295,392 56,871 674,958 Total: 472,893 14,169 618,203 295,392 56,871 1,457,528 Cotton Research and Developm e nt Corporation Administered appropriations ------Departmental appropriations - - - - 19,783 19,783 Total: - - - - 19,783 19,783 Fisheries Research and Developm e nt Corporation Administered appropriations ------Departmental appropriations - - - - 26,021 26,021 Total: - - - - 26,021 26,021 Grains Rese arch and Developm e nt Corporation Administered appropriations ------Departmental appropriations - - - - 159,511 159,511 Total: - - - - 159,511 159,511 Grape and Wine Research and Developm ent Administered appropriations ------Departmental appropriations - - - - 25,509 25,509 Total: - - - - 25,509 25,509 Rural Indus tries Research and Administered appropriations ------Departmental appropriations - - - - 26,347 26,347 Total: - - - - 26,347 26,347 Sugar Research and Developm e nt Corporation Administered appropriations ------Departmental appropriations - - - - 10,092 10,092 Total: - - - - 10,092 10,092 Portfolio total carried 472,893 14,169 618,203 295,392 324,134 1,724,791 Continued on following page

4 Portfolio Overview

Table 1: Portfolio resources 2011–12 (continued) Appropriation Special Receipts Total Bill No. 1 Bill No. 2 Special accounts $'000 $'000 $'000 $'000 $'000 $'000 Wine Australia Administered appropriations ------Departmental appropriations - - - - 11,780 11,780 Total: - - - - 11,780 11,780 Australian Fisheries Managem ent Authority Administered appropriations 5,693 - - - - 5,693 Departmental appropriations 22,985 - - 15,039 1,155 39,179 Total: 28,678 - - 15,039 1,155 44,872 Australian Pesticides and Veterinary M edicines Authority Administered appropriations ------Departmental appropriations 6,482 - - 26,738 300 33,520 Total: 6,482 - - 26,738 300 33,520 Wheat Exports Australia Administered appropriations ------Departmental appropriations - - - 3,485 - 3,485 Total: - - - 3,485 - 3,485 Portfolio total 508,053 14,169 618,203 340,654 337,369 1,818,448 Less amounts transferred w ithin portfolio (228,944) Resources available w ithin portfolio: 1,589,504

5 Agency Resources and Planned Performance

Department of Agriculture, Fisheries and Forestry 9

Cotton Research and Development Corporation87

Fisheries Research and Development Corporation 103

Grains Research and Development Corporation 123

Grape and Wine Research and Development Corporation 143

Rural Industries Research and Development Corporation 161

Sugar Research and Development Corporation 177

Wine Australia Corporation 197

Australian Fisheries Management Authority 215

Australian Pesticides and Veterinary Medicines Authority 237

Wheat Exports Australia 257

6 DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY

Section 1: Agency overview and resources 11 1.1 Strategic direction statement 11 1.2 Agency resource statement 14 1.3 Budget measures 19 Section 2: Outcomes and planned performance 23 2.1 Outcomes and performance information 23 Section 3: Explanatory tables and budgeted financial statements 71 3.1 Explanatory tables 71 3.2 Budgeted financial statements 74

7 DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

The department’s objective in 2011–12 and beyond is to implement the government’s policies to improve the productivity and sustainability of Australia’s agriculture, fishing and forestry industries and to protect Australia from exotic animal and plant pests and diseases, maintain the animal and plant health status of portfolio industries and protect the environment. The department seeks to achieve this through its two outcomes:

Major priorities for the portfolio in 2011–12 include:  improving productivity growth and sustainability in agriculture, fisheries, forestry and food production; including through reforming the registration of agvet chemicals  helping farmers to mitigate and adapt to the effects of a changing climate  reforming national drought policy from a crisis management to a preparedness approach  managing biosecurity and reforming the system  maintaining and developing overseas markets.

Productivity growth and sustainability in agriculture and food production remains a long term challenge, particularly in light of global food security concerns, impacts of climate change and resource constraints. During 2011–12, the department will continue to invest in and promote research, development and innovation and advance important initiatives in agricultural and veterinary chemicals. The department will

8 DAFF Budget Statements also lead a whole-of-government process to consider the challenges and opportunities in the food supply chain and develop a national food plan.

Through Australia’s Farming Future initiative, the department will continue to provide practical solutions to address climate change and increase productivity. The department will work with the Department of Climate Change and Energy Efficiency to implement the Carbon Farming Initiative to help mitigate Australia’s greenhouse gas emissions, and provide opportunities for Australia’s land managers to participate in carbon markets. Through this program we will also support valuable research on biochar.

Over the coming year, the department will continue to jointly manage the Caring for our Country program with the Department of Sustainability, Environment, Water, Population and Communities. Landcare will continue to be supported through Caring for our Country Business Plans, Community Action Grants and projects which help maintain national Landcare infrastructure including the Australian Landcare Council, the National Landcare Facilitator, Landcare Australia Limited and Regional Landcare Facilitators. These initiatives encourage farmer and community engagement in improved natural resources management and the adoption of land management practices that improve productivity, soil health, water quality and biodiversity in agricultural landscapes.

Reforming national drought policy remains a major priority for the department. The pilot of drought policy reform measures in Western Australia will be extended for 12 months in an expanded region. The pilot measures are designed to help farmers better manage risks and prepare for future challenges. The pilot is also trialling more effective social support services for farming families. The review of the pilot will be completed by September 2011 and will inform the government’s further consideration of national drought policy reform.

The department will continue to support farmers, their families and communities impacted by exceptional circumstances. A range of Exceptional Circumstances (EC) assistance measures and other support initiatives will continue for farmers and small businesses across rural Australia, including the EC Relief Payment and EC Interest Rate Subsidy, Transitional Income Support and the Rural Financial Counselling Service.

The department will continue to manage the risk of exotic pests and diseases entering Australia and support programs for nationally significant agricultural and environmental pests and diseases, while foundation elements of biosecurity reform are progressed. We will advance new biosecurity legislation and prepare an implementation plan to deliver a smarter biosecurity system that is responsive and targeted. We will also undertake preliminary stabilisation work on our crucial information and communication technology systems, while developing plans for streamlining and integrating information technology systems to enable smarter biosecurity management into the future. In 2011–12, the department will also invest in

9 DAFF Budget Statements our post-entry quarantine facilities and continue to work closely with industry sectors to bed down export certification reforms.

The department will continue to advance the management of Australia’s fisheries. We will review and improve approaches to support and encourage a productive, sustainable and competitive domestic fishing industry. Internationally, we will continue to engage in forums to advance Australia's regional and international interests to secure future development opportunities for industry and strengthen governance of shared fisheries resources.

A profitable and sustainable forestry industry will also be a priority for the department in 2011–12. A key activity will be the implementation of Australia’s illegal logging policy by establishing a prohibition on importation of illegally logged timber and requiring verification of the legality of timber imports. In addition, the department will work with state governments to review, and establish a renewal process for, the regional forest agreements that ensure conservation outcomes and sustainable resource access.

The department will work closely with other agencies and industry to maintain and increase access to global markets for Australia’s agriculture, fish, forest and food products. This work aims to remove trade distortions, improve international trading standards, resolve technical issues that could hinder trade, and manage sanitary and phytosanitary requirements to enable trade.

10 DAFF Budget Statements

1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: Department of Agriculture, Fisheries and Forestry resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriatio available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 Ordinary annual services Departm ental appropriation Prior year departmental appropriation1 81,133 - 81,133 51,342 Departmental appropriation2,3 - 308,526 308,526 415,871 s. 31 Relevant agency receipts4 - 56,871 56,871 52,269 Total 81,133 365,397 446,530 519,482 Adm inistered expense s 2 Outcome 1 - 149,169 149,169 205,896 Outcome 2 - 15,198 15,198 21,706 Total - 164,367 164,367 227,602 Total ordinary annual services A 81,133 529,764 610,897 747,084 Other services 5 Departm ental non-operating Equity injections - 14,169 14,169 1,271 Total - 14,169 14,169 1,271 Total other services B - 14,169 14,169 1,271 Total available annual appropriations (A+B) 81,133 543,933 625,066 748,355 Special appropriations Special appropriations lim ited by criteria/entitlem ent Australian Animal Health Council (Live-stock Industries) Funding Act 1996, s. 5 - 6,312 6,312 6,296 Australian Meat and Live-stock Industry Act 1 997, s. 63(2) – payments to the industry marketing body - 75,786 75,786 74,732 Australian Meat and Live-stock Industry Act 1997, s. 64(2) – payments to the industry research body - 24,293 24,293 24,179 Special appropriations carried forw ard - 106,391 106,391 105,207 Continued on following pages

11 DAFF Budget Statements

Table 1.1: Department of Agriculture, Fisheries and Forestry resource statement — Budget estimates for 2011–12 as at Budget May 2011 (continued) Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriatio available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 Australian Meat and Live-stock Industry Act 1997, s. 64A(2) – payments to the livestock export marketing body - 3,198 3,198 3,396 Australian Meat and Live-stock Industry Act 1997, s. 64B(2) – payments to the livestock export research body - 800 800 849 Australian Meat and Live-stock Industry Act 1997, s. 64C(2) – payments to the meat processor marketing body - 5,603 5,603 6,102 Australian Meat and Live-stock Industry Act 1997, s. 64D(2) – payments to the meat processor research body - 10,106 10,106 11,127 Australian Meat and Live-stock Industry Act 1997, s. 66(1) – Commonw ealth contribution to industry research body - 42,206 42,206 53,104 Dairy Produce Act 1986, s. 6(1) - 46,283 46,283 51,524 Egg Industry Service Provision Act 2002, s. 8(1) - 8,946 8,946 7,983 Farm Household Support Act 1992, s. 57(3) – Exceptional Circumstances Relief Payments - 8,379 8,379 152,035 Financial Management and Accountability Act 1997, s. 28(2) – payment of refunds not elsew here appropriated - 2,000 2,000 6,412 Forestry Marketing and Research and Development Services Act 2007, s. 9(1) payments and matching payments to an industry services body and - 10,186 10,186 10,859 Horticulture Marketing and Research and Development Services Act 2000, s. 16(9) - 75,135 75,135 81,728 Special appropriations carried forw ard - 319,233 319,233 490,326 Continued on following pages

12 DAFF Budget Statements

Table 1.1: Department of Agriculture, Fisheries and Forestry resource statement — Budget estimates for 2011–12 as at Budget May 2011 (continued) Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriatio available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 National Residue Survey Administration Act 1992, s. 6 - 9,493 9,493 10,260 Pig Industry Act 2001, s. 10(1) - 16,005 16,005 17,033 Plant Health Australia (Plant Industries) Funding Act 2002, - 1,072 1,072 1,381 Plant Health Australia (Plant Industries) Funding Act 2002, s. 10B - 430 430 419 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Cotton R&D Corporation - 14,819 14,819 12,768 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grains R&D Corporation – Other Grains - 59,043 59,043 61,766 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grains R&D Corporation – Wheat - 81,363 81,363 81,965 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grape and Wine R&D Corporation - 24,728 24,728 27,828 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Rural Industries R&D Corporation - 7,190 7,190 5,587 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Sugar R&D Corporation - 9,644 9,644 10,790 Primary Industries and Energy Research and Development Act 1989, s. 30A(3) – Fisheries R&D Corporation - 16,447 16,447 17,242 Wine Australia Corporation Act 1980, s. 32 - 4,936 4,936 5,307 Wool Services Privatisation Act 2000, s. 31(4) - 53,800 53,800 51,305 Total special appropriations C - 618,203 618,203 793,977 Total appropriations excluding special accounts (A+B+C) 81,133 1,162,136 1,243,269 1,542,332 Continued on following pages

13 DAFF Budget Statements

Table 1.1: Department of Agriculture, Fisheries and Forestry resource statement — Budget estimates for 2011–12 as at Budget May 2011 (continued) Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriatio available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 Special accounts Opening balance6 51,809 - 51,809 43,761 Appropriation receipts7 - 166,429 166,429 241,623 Non-appropriation receipts to special accounts - 295,392 295,392 284,693 Total special accounts D 51,809 461,821 513,630 570,077 Total resourcing (A+B+C+D) 132,942 1,623,957 1,756,899 2,112,409 Less appropriations draw n from - (395,373) (395,373) (475,390) annual or special appropriations above and credited to special accounts and/or CAC Act bodies through appropriations Total net resourcing for DAFF 132,942 1,228,584 1,361,526 1,637,019 1 Estimated adjusted balance carried forward from previous year. 2 Appropriation Bill (No.1) 2011–12. 3 Includes an amount of $11.819 million in 2011–12 for the Departmental Capital Budget (refer to table 3.2.5 for further details). For accounting purposes this amount has been designated as 'contributions by owners'. 4 s. 31 Relevant Agency receipts — estimate. The department has changed its accounting treatment of section 31 receipts since the 2010–11 Portfolio Budget Statements. This figure no longer includes receipts from the sale of goods and services that are credited to special accounts. 5 Appropriation Bill (No.2) 2011–12. 6 Estimated opening balance for special accounts (less ‘Special Public Money’ held in accounts like other trust monies accounts (OTM) and services for other government and non-agency bodies accounts (SOG). For further information on special accounts see Table 3.1.2. 7 Appropriation receipts from annual and special appropriations for 2011–12 included above.

All figures are GST exclusive.

Continued on following page

14 DAFF Budget Statements

Table 1.1: Department of Agriculture, Fisheries and Forestry resource statement — Budget estimates for 2011–12 as at Budget May 2011 (continued) Third party payments from and on behalf of other agencies Appropriation 2011–12 2010–11 type $'000 $'000 Paym ents m ade by other agencies on behalf of DAFF Centrelink Drought Assistance – Interim Income Support Payments Bill 1 - 1,094 Drought Assistance – Professional Advice Bill 1 - 15,500 Drought Assistance – Re-establishment Bill 1 9,613 24,000 Drought policy reform – pilot of new measures in Western Australia Bill 1 12,757 2,863 Farm Household Support Act 1992, s. 57(3) – Exceptional Circumstances Relief Payments Special 8,379 152,035 Tackling Climate Change – Australia's Farming Future – Climate Change Adjustment Program Bill 1 16,414 16,760 Total paym ents m ade by other agencies 47,163 212,252 Paym ents m ade to other agencies for the provision of services Bill 1 60,393 59,900 Paym ents m ade to CAC Act bodies w ithin the portfolio Cotton Research and Development Corporation Special 14,819 12,768 Fisheries Research and Development Corporation Special 16,447 17,242 Grains Research and Development Corporation Special 140,406 143,731 Grape and Wine Research and Development Corporation Special 24,728 27,828 Rural Industries Research and Development Corporation Bill 1 10,774 10,514 Rural Industries Research and Development Corporation Special 7,190 5,587 Sugar Research and Development Corporation Special 9,644 10,790 Wine Australia Corporation Special 4,936 5,307 Total CAC paym ents 228,944 233,767

15 DAFF Budget Statements

1.3 BUDGET MEASURES

Budget measures relating to the department are detailed in Budget Paper No. 2 and are summarised below. Table 1.2: Department of Agriculture, Fisheries and Forestry 2011–12 Budget measures Program 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Revenue m easures Changes to agricultural production levies1 All O1 Administered expenses (10,456) (21,853) (22,311) (22,650) (22,953) Departmental expenses - - - - - Total (10,456) (21,853) (22,311) (22,650) (22,953) Total revenue m easures Administered (10,456) (21,853) (22,311) (22,650) (22,953) Departmental - - - - - Total (10,456) (21,853) (22,311) (22,650) (22,953) Expense m easures Animal and Plant Pest and Disease Eradication Programs – meeting existing commitments2 2.2 Administered expenses - - - - - Departmental expenses - - - - - Total - - - - - Changes to agricultural production levies1 All O1 Administered expenses 10,456 21,913 22,372 22,712 23,017 Departmental expenses - - - - - Total 10,456 21,913 22,372 22,712 23,017 Department of Agriculture, Fisheries and Forestry – departmental Various Administered expenses - - - - - Departmental expenses - 806 (11,112) (11,219) (11,318) Total - 806 (11,112) (11,219) (11,318) Drought Assistance 1.11 – Exceptional Circumstances assistance for primary producers Administered expenses 2,185 6,556 - - - Departmental expenses - - - - - Total 2,185 6,556 - - - Expense m easures carried forw ard Administered 12,641 28,469 22,372 22,712 23,017 Departmental - 806 (11,112) (11,219) (11,318) Total 12,641 29,275 11,260 11,493 11,699 Continued on following pages

16 DAFF Budget Statements

Table 1.2: Department of Agriculture, Fisheries and Forestry 2011–12 Budget measures (continued) Program 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Drought Assistance – Exceptional Circumstances assistance for small businesses 1.11 Administered expenses 169 508 - - - Departmental expenses - - - - - Total 169 508 - - - Drought Assistance – interim income support for primary producers – Delungra area3 1.11 Administered expenses 950 - - - - Departmental expenses - - - - - Total 950 - - - - Drought Assistance – interim income support for small business – Delungra area3 1.11 Administered expenses 144 - - - - Departmental expenses - - - - - Total 144 - - - - Drought Assistance – professional advice and planning grant – w ind up costs4 1.11 Administered expenses - - - - - Departmental expenses - - - - - Total - - - - - Drought Assistance – re-establishment assistance – extension 1.11 Administered expenses - 9,613 - - - Departmental expenses - - - - - Total - 9,613 - - - Drought Assistance – transitional income support – extension 1.11 Administered expenses - 12,814 - - - Departmental expenses - - - - - Total - 12,814 - - - Drought policy reform – pilot of new measures in Western Australia – extension and expansion5 1.11 Administered expenses - 12,967 - - - Departmental expenses - 587 - - - Total - 13,554 - - - Expense m easures carried forw ard Administered 13,904 64,371 22,372 22,712 23,017 Departmental - 1,393 (11,112) (11,219) (11,318) Total 13,904 65,764 11,260 11,493 11,699 Continued on following page

17 DAFF Budget Statements

Table 1.2: Department of Agriculture, Fisheries and Forestry 2011–12 Budget measures (continued) Program 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Efficiency dividend – temporary increase in the rate6 Various Administered expenses - - - - - Departmental expenses - (1,452) (2,522) (3,204) (3,816) Total - (1,452) (2,522) (3,204) (3,816) Future Post-Entry Quarantine Arrangements – initial w ork7 2.1 Administered expenses - 400 - - - Departmental expenses - 5,000 - - - Total - 5,400 - - - Maintain funding for Quarantine Border Security – extension8 2.1 Administered expenses - - - - - Departmental expenses - - - - - Total - - - - - Reform of Australia's biosecurity system – enhancement of Information Communication and Technology systems 2.1 Administered expenses - - - - - Departmental expenses - 4,187 - - - Total - 4,187 - - - Total expe nse m easures Administered 13,904 64,771 22,372 22,712 23,017 Departmental - 9,128 (13,634) (14,423) (15,134) Total 13,904 73,899 8,738 8,289 7,883 Capital m easures Efficiency dividend – temporary increase in the rate6 Various Administered capital - - - - - Departmental capital - (60) (143) (180) (194) Total - (60) (143) (180) (194) Future Post-Entry Quarantine Arrangements – initial w ork7 2.1 Administered capital - - - - - Departmental capital - 13,700 - - - Total - 13,700 - - - Total capital m easures Administered - - - - - Departmental - 13,640 (143) (180) (194) Total - 13,640 (143) (180) (194) 1 The measures for ‘Changes to agricultural production levies’ are reflected under both the revenue and expense measure headings. 2 The government has allocated $12.6 million in 2010–11 and $2.8 million in 2012–13 for the ‘Animal and Plant Pest and Disease Eradication Programs – meeting existing commitments’ measure. Payments will be made by the Department of the Treasury. 3 The measures for ‘Drought Assistance – interim income support for primary producers and small business – Delungra area’ were previously published in the 2010–11 Agriculture, Fisheries and Forestry Portfolio Additional Estimates Statements, however the measure was not published in the 2010–11 Mid-Year economic and Fiscal Outlook.

18 DAFF Budget Statements

4 The lead agency for the ‘Drought Assistance – professional advice and planning grant – wind up costs’ is the Department of Human Services (Centrelink). The full measure description appears in Budget Paper No.2 under the Human Services portfolio. 5 The government has allocated $44.1 million for the ‘Drought policy reform – pilot of new measures in Western Australia – extension and expansion’ measure. DAFF has been allocated $13.5 million, the Department of the Treasury $20.1 million, and $10.5 million to be shared between the Department of Families, Housing, Community Services and Indigenous Affairs, the Department of Human Services (Centrelink), the Department of Health and Ageing and the Department of Education, Employment and Workplace Relations. 6 The lead agency for the ‘Efficiency dividend – temporary increase in the rate’ is the Department of Finance and Deregulation. The full measure description appears in Budget Paper No.2 under the Cross Portfolio section. 7 The government has allocated $19.1 million for the ‘Future Post-Entry Quarantine Arrangements – initial work’ measure. Funding of $13.7 million appropriated through the capital measure will be utilised for urgent capital work at existing facilities. 8 Funding is already incorporated in the forward years.

Prepared on a Government Financial Statistics (fiscal) basis.

19 DAFF Budget Statements

Section 2: Outcomes and planned performance

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of the department in achieving government outcomes.

The department has reviewed all program objectives, deliverables and key performance indicators to ensure clear and consistent linkages, and improve transparency of performance. Where significant changes have been made to performance information the department will report its achievements against previous indicators in its 2010–11 Annual Report.

Outcome 1: More sustainable, productive, internationally competitive and profitable Australian agricultural, food and fibre industries through policies and initiatives that promote better resource management practices, innovation, self-reliance and improved access to international markets. Outcome 1 Strategy Contributions to achieving this outcome during 2011–12 will include:  reforming national drought policy from a crisis management to a preparedness approach  delivering programs promoting and supporting climate change mitigation and adaptation, including helping farmers to better manage risks and prepare for future challenges through information, skills, techniques and assistance  working with industry, other government agencies and internationally to improve productivity growth and sustainability and consider supply chain challenges and opportunities, particularly for food  investing in targeted research and development to drive innovation and adoption of new practices that will underpin more competitive, productive, adaptive and sustainable agriculture, fishing and forestry industries  conducting research and providing findings, data, analysis and advice to inform decision making and policy development by industry and government, and in international forums  maintaining and improving market access, reducing trade distortions, fostering agricultural cooperation and assisting in development of international trading standards.

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Outcome 1 Expense Statement Table 2.1 provides an overview of the total expenses for outcome 1 by program.

Table 2.1: Budgeted Expenses for Outcome 1 Ou t co m e 1: M o r e s u s t ain ab le , p r o d u ctive , in t e rn atio n ally 2010–11 2011–12 co m pe t itive an d p r o fitab le A u s tr alian ag r icu lt u r al, fo o d an d Estimated Estimated f ib r e in du s t r ie s t h ro u g h p o licie s an d in it iative s th at p r o m o te actual expenses b e t te r r e s o u rce m an ag e m e n t p r actice s , in n o vatio n, s e lf- expenses r e liance an d im p r o ve d acce s s to in te r n atio n al m ar k e ts . $'000 $'000 Pr o g ram 1.1: T ack lin g C lim ate Ch an g e – Au s t r alia's Far m in g Fu t u re – Clim ate C h an g e Administered expenses Ordinary annual services (Appropriation Bill No. 1) Carbon Farming Initiative 300 2,300 Tackling Climate Change – Australia's Farming Future – Climate Change A daptation Partnerships Program 10,860 10,220 Tackling Climate Change – Australia's Farming Future – Climate Change A djustment Program 17,950 16,414 Tackling Climate Change – Climate Change Research Program 15,000 6,200 Departmental expenses Departmental appropriation1 8,258 7,980 Expenses not requiring appropriation in the budget year 2 89 90 T ot al fo r Pr o gr am 1.1 52,457 43,204 Pr o g ram 1.2: Su s tain ab le M an ag em e nt – Natu r al Re s o u r ce s Administered expenses Ordinary annual services (Appropriation Bill No. 1) Caring f or our Country – Landcare 34,020 37,123 Caring f or our Country – Landcare transf er to special account (34,020) (37,123) National Weeds and Productivity Research Program 4,000 4,000 Special accounts Natural Resources Management Account – s. 11, N atural Resources Management (Fi nancial Assistance) Act 1992 34,020 37,123 Departmental expenses Departmental appropriation1 21,908 20,309 Expenses not requiring appropriation in the budget year 2 237 228 T ot al fo r Pr o gr am 1.2 60,165 61,660 Pr o g ram 1.3: Fo re s try In d u s tr y Administered expenses Ordinary annual services (Appropriation Bill No. 1) Australia's Forest Industry – preparing for the f uture 4,584 - Tasmanian Forestry Policy – Tasmanian Contractors Assistance Program 17,000 - Special appropriations Forestry Marketing and Research and Development Servi ces Act 2007, s. 9(1) payments and matching payments to an industry services body and Commonw ealth administration 10,859 10,186 Departmental expenses Departmental appropriation1 7,025 14,994 Expenses not requiring appropriation in the budget year 2 76 168 T ot al fo r Pr o gr am 1.3 39,544 25,348 Continued on following pages

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Table 2.1: Budgeted Expenses for Outcome 1 (continued) 2010–11 2011–12 Estimated Estimated actual expenses expenses $'000 $'000 Pr o g ram 1.4: Fis h in g In d u s tr y Administered expenses Ordinary annual services (Appropriation Bill No. 1) Fisheries Resources Research Fund 3,184 3,244 Fishing Structural Adjustment Package 1,832 - Recreational Fishing Industry Development Strategy Program 1,000 - Special appropriations Pri mary Industries and Energy Research and Development Act 1989, 17,242 16,447 Departmental expenses Departmental appropriation1 7,117 6,723 Expenses not requiring appropriation in the budget year 2 77 76 T ot al fo r Pr o gr am 1.4 30,452 26,490 Pr o g ram 1.5: Ho rt icu ltu r e In d u s t ry Administered expenses Ordinary annual services (Appropriation Bill No. 1) Promoting Australian Produce Program 2,000 - Regional Food Producers' Innovation and Productivity Program 5,500 5,800 Special appropriations Horticulture Marketing and R esearch and Development Services Act 2000, s. 16(9) 81,728 75,135 Departmental expenses Departmental appropriation1 6,866 7,991 Expenses not requiring appropriation in the budget year 2 74 90 T ot al fo r Pr o gr am 1.5 96,168 89,016 Pr o g ram 1.6: Wo o l In d u s tr y Administered expenses Special appropriations Wool Services Privati sation Act 2000, s. 31(4) 51,305 53,800 Departmental expenses Departmental appropriation1 350 474 Expenses not requiring appropriation in the budget year 2 4 5 T ot al fo r Pr o gr am 1.6 51,659 54,279 Pr o g ram 1.7: Gr ain s In d u s t ry Administered expenses Special appropriations Pri mary Industries and Energy Research and Development Act 1989, 61,766 59,043 Pri mary Industries and Energy Research and Development Act 1989, 81,965 81,363 Departmental expenses Departmental appropriation1 2,721 1,997 Expenses not requiring appropriation in the budget year 2 29 22 T ot al fo r Pr o gr am 1.7 146,481 142,425 Continued on following pages

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Table 2.1: Budgeted Expenses for Outcome 1 (continued) 2010–11 2011–12 Estimated Estimated actual expenses expenses $'000 $'000 Pr o g ram 1.8: Dair y In d u s tr y Administered expenses Special appropriations Dairy Produce Act 1986, s. 6(1) 51,524 46,283 Departmental expenses Departmental appropriation1 845 841 Expenses not requiring appropriation in the budget year2 9 9 T ot al fo r Pr o gr am 1.8 52,378 47,133 Pr o g ram 1.9: M e at an d L ive s to ck In d us tr y Administered expenses Special appropriations Australian Meat and Live-stock Industry Act 1997, s. 63(2) – payments to the industry marketing body 74,732 75,786 Australian Meat and Live-stock Industry Act 1997, s. 64(2) – payments to the industry research body 24,179 24,293 Australian Meat and Live-stock Industry Act 1997, s. 64A(2) – payments to the livestock export marketing body 3,396 3,198 Australian Meat and Live-stock Industry Act 1997, s. 64B(2) – payments to the livestock export research body 849 800 Australian Meat and Live-stock Industry Act 1997, s. 64C(2) – payments to the meat processor marketing body 6,102 5,603 Australian Meat and Live-stock Industry Act 1997, s. 64D(2) – payments to the meat processor research body 11,127 10,106 Australian Meat and Live-stock Industry Act 1997, s. 66(1) – Commonw ealth contribution to industry research body 53,104 42,206 Pig Industry Act 2001, s. 10(1) 17,033 16,005 Departmental expenses Departmental appropriation1 1,868 1,649 Expenses not requiring appropriation in the budget year2 20 19 T ot al fo r Pr o gr am 1.9 192,410 179,665 Continued on following pages

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Table 2.1: Budgeted Expenses for Outcome 1 (continued) 2010–11 2011–12 Estimated Estimated actual expenses expenses $'000 $'000 Program 1.10: Agricultural Resources Administered expenses Ordinary annual services (Appropriation Bill No. 1) Agricultural and Veterinary Chemicals Minor Use Program3 - 135 Australian Animal Welfare Strategy3 - 991 Centre of Excellence for Biosecurity Risk Analysis and Research4 1,687 - Northern Australia Beef Industry Strategy – Indigenous Pastoral 250 250 Promoting Australian Produce Program – Major Events 3,000 - Rural Industries Research and Development Corporation 10,514 10,774 Special appropriations Egg Industry Service Provision Act 2002, s. 8(1) 7,983 8,946 Financial Management and Accountability Act 1997, s. 28(2) – payment of refunds not elsew here appropriated 6,412 2,000 Primary Industries and Energy Research and Development Act 1989, 12,768 14,819 Primary Industries and Energy Research and Development Act 1989, 27,828 24,728 Primary Industries and Energy Research and Development Act 1989, 5,587 7,190 Primary Industries and Energy Research and Development Act 1989, 10,790 9,644 Wine Australia Corporation Act 1980, s. 32 5,307 4,936 Departmental expenses Departmental appropriation1 59,695 60,805 Expenses not requiring appropriation in the budget year2 644 683 Total for Program 1.10 152,465 145,901 Program 1.11: Drought Program s Administered expenses Ordinary annual services (Appropriation Bill No. 1) Drought Assistance – Interim Income Support Payments 1,094 - Drought Assistance – Professional Advice 15,500 - Drought Assistance – Re-establishment Assistance 24,000 9,613 Drought policy reform – pilot of new measures in Western 4,221 13,145 Special appropriations Farm Household Support Act 1992, s. 57(3) – Exceptional Circumstances Relief Payments 152,035 8,379 Departmental expenses Departmental appropriation1 7,626 6,929 Expenses not requiring appropriation in the budget year2 82 78 Total for Program 1.11 204,558 38,144 Continued on following page

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Table 2.1: Budgeted Expenses for Outcome 1 (continued) 2010–11 2011–12 Estimated Estimated actual expenses expenses $'000 $'000 Program 1.12: Rural Program s Administered expenses Ordinary annual services (Appropriation Bill No. 1) Rural Financial Counselling Service 12,820 13,322 Departmental expenses Departmental appropriation1 1,947 2,094 Expenses not requiring appropriation in the budget year2 21 24 Total for Program 1.12 14,788 15,440 Program 1.13: International Market Access Administered expenses Ordinary annual services (Appropriation Bill No. 1) AAA – International Agricultural Cooperation 832 859 Food and Agriculture Organization of the United Nations (FAO) 12,531 12,531 International Organisations Contributions 1,667 1,698 Live Trade Animal Welfare Partnership 550 550 Departmental expenses Departmental appropriation1 34,892 35,060 Expenses not requiring appropriation in the budget year2 377 394 Total for Program 1.13 50,849 51,092 Outcom e 1 Totals by appropriation type Administered expenses Ordinary annual services (Appropriation Bill No. 1) 171,876 112,046 Special appropriations 775,621 600,896 Special accounts 34,020 37,123 Departmental expenses Departmental appropriation1 161,118 167,846 Expenses not requiring appropriation in the budget year2 1,739 1,886 Total expenses for Outcom e 1 1,144,374 919,797

2010–11 2011–12 Estimated Estimated actual Budget Average Staffing Level (num ber) 797 834 1 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees. 3 The Agricultural and Veterinary Chemicals Minor Use Program and the Australian Animal Welfare Strategy items have been moved to Program 1.10 from 1 July 2011 onwards. The estimated actuals for 2010–11 are reflected in Program 2.2. 4 The Centre of Excellence for Biosecurity Risk Analysis and Research item has been moved to Program 2.1 from 1 July 2011 onwards.

Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change.

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Contributions to Outcome 1

Program 1.1: Tackling Climate Change – Australia's Farming Future – Climate Change

Program objective  Strengthen the capacity for primary producers to adapt and adjust to a changing climate while increasing productivity.  Australian farmers and land managers participate in, and benefit from, the carbon crediting scheme by generating carbon offset credits that can be sold in domestic and international carbon markets.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Pr o g r am 1.1: T ack lin g C lim ate C han g e – Au s tr alia' s Far m in g Fu tu r e – C lim ate C h an g e Annual administered expenses: Carbon Farming Initiative 300 2,300 2,200 1,200 - Tackling Climate Change – Australia's Farming Future – Climate Change Adaptation Partnerships Program 10,860 10,220 - - - Tackling Climate Change – Australia's Farming Future – Climate Change Adjustment Program 17,950 16,414 - - - Tackling Climate Change – Climate Change Research Program 15,000 6,200 - - - Departmental expenses Departmental appropriation1 8,258 7,980 7,687 7,708 7,654 Expenses not requiring appropriation in the budget year 2 89 90 93 92 93 T o t al p r o g r am e xp e n s e s 52,457 43,204 9,980 9,000 7,747 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

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Program 1.1 Deliverables The overarching objective of Australia’s Farming Future will be achieved through the delivery of the program’s individual elements. These are:  FarmReady funding to enable primary producers and industries to adapt and adjust to a changing climate by improving adoption of risk management and business management skills and increasing adoption of new technologies and best practice management. The program elements are:

- FarmReady Reimbursement Grants to eligible individuals to attend approved climate change training activities

- FarmReady Industry Grants to industry organisations, farming groups and natural resource management groups to undertake projects to enable their members to adapt to the impacts of a changing climate.

 Community Networks and Capacity Building (CNCB) funding to increase and strengthen primary industry productivity and build rural, regional and remote community resilience to a changing climate. The target groups include women, young people, Indigenous Australians and people from culturally and linguistically diverse backgrounds.

 Work with Centrelink to deliver the Climate Change Adjustment Program, to assist farmers to manage the impacts of climate change on their businesses, set goals and take action to improve their long term financial security. The program components are:

- an advice and training grant of up to $5500

- Transitional Income Support (TIS) to eligible farm families in financial difficulty.

 Invest in research and development, and demonstrate activities through the Climate Change Research Program to provide tools, techniques and new technology to primary producers to help them to lower greenhouse gas emissions and adapt to the unavoidable impacts of climate change without losing productivity.

 Provide information to land managers by communicating through the Landcare framework, about the operation of the carbon offset market and how they can benefit.

 Investigate biochar as an option for Australia’s land managers to help mitigate Australia’s greenhouse gas emissions and develop opportunities to participate in carbon markets, through the Biochar Capacity Building Program, a component of the Carbon Farming Initiative.

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Program 1.1 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Key Performance Indicators budget year 1 year 2 year 3 Clim ate Change Adaptation Partnerships Program Deliver FarmReady Reimbursement 2,700 3,200 - - - grants. grants. grants. Aw ard FarmReady Industry - - - - - Support targeted CNCB activities 20 projects. 20 projects. - - - and projects. Develop and implement Communic- Communic- - - - communications strategy. ations ations activities activities underw ay. completed. Clim ate Change Adjustm ent Program Transitional Income Support: TIS claims processed in 95% 95% - - - accordance w ith the Protocol agreed w ith Centrelink. Rural Financial Counselling Service 100% 100% - - - case manage TIS clients to complete an action plan. Clim ate Change Research Undertake large scale Minimum of All projects - - - collaborative research projects 12 projects finalised. w ith cross sectoral application. / packages. Carbon Farm ing Initiative Landcare Com m unications Through the landcare framew ork communicate information to land managers about the operation of the carbon offset market and its benefits by: – Carbon Farming Initiative National 1 - - - - Forum for Australian Government facilitators – Regionally based land managers 3 3 3 3 - w orkshops. Biochar Capacity Building Undertake collaborative projects to - Minimum of Minimum of Minimum of - explore the potential of biochar. 2 projects / 2 projects / 2 projects / packages. packages. packages. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved. * FarmReady Industry Grants awarded in Round 1 and Round 2 continue to be implemented in 2010–11 and 2011–12.

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Contributions to Outcome 1 (continued)

Program 1.2: Sustainable Management – Natural Resources

Program objective  Strengthen the capacity for primary producers to use sustainable natural resource management practices in a changing climate.  Strengthen the national approach to weed and pest animal management and research. Linked to: Caring for our Country – Department of Sustainability, Environment, Population and Communities.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.2: Sustainable Managem ent – Natural Resources Annual administered expenses: Caring for our Country – Landcare 34,020 37,123 37,127 37,177 37,177 Caring for our Country – Landcare transfer to special account (34,020) (37,123) (37,127) (37,177) (37,177) National Weeds and Productivity Research Program 4,000 4,000 - - - Special Account: Natural Resources Management Account – s. 11, Natural Resources Management 34,020 37,123 37,127 37,177 37,177 Departmental expenses Departmental appropriation1 21,908 20,309 19,317 19,415 19,281 Expenses not requiring appropriation in the budget year2 237 228 233 233 235 Total program expenses 60,165 61,660 56,677 56,825 56,693 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.2 Deliverables  Review the effectiveness of the Caring for our Country program in supporting an agricultural sector based on the sustainable management of natural resources.  Manage agreements with regional Natural Resource Management (NRM) bodies to increase their capacity to deliver Caring for our Country outcomes.  Report on progress towards the five-year outcomes of the Caring for our Country program through release of the 2010–11 annual report card.  Increase the adoption of sustainable management practices, knowledge and natural resource management skills by providing grants to eligible land managers, primary producers and fishers.

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 Provide Community Action Grants to support the participation of community groups in natural resource management activities.  Develop and maintain a national network of 56 Regional Landcare Facilitators to support community participation in natural resource management.  Support the Australian Landcare Council to provide advice on natural resource management including; Indigenous NRM engagement; an Action Plan to support the Australian Framework for Landcare; support regional delivery of NRM; and recruitment and retention of Landcare volunteers.  Provide leadership and support for national collaboration on sustainable resource management, including; contribution to the review of the Environment Protection and Biodiversity Conservation Act and National Vegetation Framework; contribution to the implementation of the National Biodiversity Strategy: management of the Australian Collaborative Land Evaluation Program and development of a national approach to sustainable agriculture. Commission research, communicate information and provide policy advice on sustainable land management practices, including: - soil condition, and priorities for combined action on soils - soil health extension programs and data sharing - the adoption of new management practices.  Provide leadership and co-ordination for the management of weeds and pest animals, including: - facilitation and monitoring of the co-ordinated control of weeds and pest animals - funding research to develop improved products and practices for integrated pest control.  Manage the delivery of the Weeds of National Significance program and maintenance of a national network of Weeds of National Significance co-ordinators.  Provide high level and timely policy advice and support to the minister on issues affecting sustainable land management.

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Program 1.2 Key Performance Indicators Provide policy advice, fund applied research, and manage grants for on-ground works and extension, to strengthen the capacity of primary producers to:  improve sustainable soil management  reduce the rate of spread of weeds of national significance  increase industry adoption of weed and pest management plans. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Increase the number of land 8,400 8,400 8,400 Note2 Note2 managers, primary producers and farmers. farmers. farmers. fishers w ho have improved their know ledge and skills in natural resource management and adoption of sustainable management practices.1 Increase the number of primary 1,675 1,675 1,675 Note2 Note2 producers w ho have adopted farmers. farmers. farmers. activities that contribute to the conservation and protection of biodiversity.1 Increase the number of hectares 23,500 23,500 23,500 Note2 Note2 of land that are under cropping, hectares. hectares. hectares. horticulture and grazing w ith improved practices.1 Increase the number of 85 85 85 Note2 Note2 commercial fishers w ho have fishers. fishers. fishers. improved practices to optimise Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved. 1 KPI measures are inclusive for all Caring for our Country investment. Refer also to the Department of Sustainability, Environment, Water, Population and Communities PB Statements. 2 No KPIs have been developed beyond current appropriation.

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Contributions to Outcome 1 (continued)

Program 1.3: Forestry Industry

Program objective Foster and enable a productive, profitable, international competitive and sustainable Australian forest and forest products industry. Linked to: International Forest Carbon Initiative – Department of Climate Change and Energy Efficiency Program 1.4: Helping to shape a global climate change solution.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.3: Forestry Industry Annual administered expenses: Australia's Forest Industry – preparing for the future 4,584 - - - - Tasmanian Forestry Policy – Tasmanian Contractors Assistance Program 17,000 - - - - Special appropriations: Forestry Marketing and Research and Development Services Act 2007, s. 9(1) payments and matching payments to an industry services body and Commonw ealth administration expenses 10,859 10,186 9,744 9,906 10,102 Departmental expenses Departmental appropriation1 7,025 14,994 6,033 6,057 6,015 Expenses not requiring appropriation in the budget year2 76 168 73 73 73 Total program expens es 39,544 25,348 15,850 16,036 16,190 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.3 Deliverables  Provide high quality and timely policy advice and support on forestry issues to the minister and executive.  Maintain productive relationships with domestic and international stakeholders.  Continue to support the Regional Forest Agreements (RFAs), their reviews and the development of a renewal process.  Develop and implement regulatory and administrative approaches to implement the Government’s illegal logging policy.  Manage departmental programs and bilateral agreements to enhance the capacity for, and implementation of, sustainable forest management activities in the Asia-Pacific region, in particular improvement of timber legality verification systems.

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 Pay levy funds to Forest and Wood Products Australia. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Deliver forestry grant programs: Grants and - - - - – Australia's forest industry – projects Preparing for the future finalised – Forest Industries Development and paid.1 Fund – Tasmanian Forest Contractors Exit Assistance Program 1 Australia's Forestry Industry – Preparing for the future and the Tasmanian Forestry Policy – Tasmanian Contractors Assistance Program ceases 2010–11.

Program 1.3 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators1 budget target year 1 year 2 year 3 Meet w ith peak industry bodies 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. through the Forest and Wood Products Council. Grantees comply w ith funding 100% 100% 100% 100% 100% requirements. Engage RFA states on intent and - Joint Joint report - Joint report performance of agreements. reports w ith TAS w ith VIC on w ith NSW on implement- and WA on implementation of implementation of agreement. ation of agreement. Process in place to combat illegally Policy Commence-Introduction Policy and - logged timber entering the announced ment of of regulatory Australian market. . primary subordinat regime in legislation. e operation. Renew al process for Regional - Renew al - - - Forestry Agreements in place. process agreed w ith Timely delivery of the Asia-Pacific Grant Grant Grants - - forestry skills initiative. milestones milestones finalised. met. met. All levy funds paid to Forest and 100% 100% 100% 100% 100% Wood Products Australia in accordance w ith Statutory Funding Agreement. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved. 1 Changes have been made to key performance indicators to clarify the linkages between objectives, deliverables and key performance indicators. Achievement against previous indicators will be published in the DAFF Annual Report.

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Contributions to Outcome 1 (continued)

Program 1.4: Fishing Industry

Program objective Support and encourage productive, sustainable and competitive fishing and aquaculture industries.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.4: Fishing Industry Annual administered expenses: Fisheries Resources Research Fund 3,184 3,244 3,315 3,382 3,455 Fishing Structural Adjustment Package 1,832 - - - - Recreational Fishing Industry Development Strategy Program 1,000 - - - - Special appropriations: Primary Industries and Energy Research and Development Act 1989, s. 30A(3) – Fisheries R&D Corporation 17,242 16,447 16,407 16,485 16,900 Departmental expenses Departmental appropriation1 7,117 6,723 6,612 6,180 6,137 Expenses not requiring appropriation in the budget year2 77 76 80 74 75 Total program expenses 30,452 26,490 26,414 26,121 26,567 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.4 Deliverables Develop and implement policy and legislative frameworks.  Implement agreed projects in support of a National Recreational Fishing Strategy and support the development of the Recreational Fishing Roundtable meetings.  Provide policy support for domestic fisheries harvest strategies, ecosystem based fisheries management, national aquaculture development and marine bioregional planning.  A review of Commonwealth Fisheries Harvest Strategy Policy to be undertaken during 2012.  Provide governance and policy advice that assists with trade negotiations and protects international fisheries.  Develop regulatory options for aquaculture in Commonwealth waters.  Work with other jurisdictions on resource sharing issues.  Provide high level policy and timely advice and support to the minister on issues affecting the fishing industry.

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Develop and enhance regional and international cooperation.  Represent Australia’s interests in sustainable fisheries management through regional and international fora.  Contribute to Australia’s interests in broader cooperation in the pacific region by engaging with Pacific Island countries on fisheries issues. Reduce the impacts of illegal foreign fishing on Australia through capacity building and collaboration with key partners.  Contribute to conservation and management measures and reform agendas in regional and international fisheries fora which take account of Australia’s interests, by providing scientific and economic assessments, policy advice and representation. Support scientific and economic research to inform Commonwealth fisheries policy  Fund and oversee targeted research.  Provide information on the status of Commonwealth fish stocks through the Fisheries Status Report.

Program 1.4 Key Performance Indicators Increased regional and international cooperation as measured by:  progress through regional and international forums, towards the adoption of conservation and management resources consistent with Australia's interests  reducing trend in the impact of illegal fishing in Australian waters. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Agreed National Recreational - 100% - - - Fishing Strategy projects implemented on time and w ithin Review of the Commonw ealth - Underw ay. Completed. - - Fisheries Harvest Strategy Policy. Negotiation positions and briefing 100% 100% 100% - - papers for programmed trade and other international negotiations endorsed by the government. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

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Contributions to Outcome 1 (continued)

Program 1.5: Horticulture Industry

Program objective  Advance and improve the competitiveness of Australia’s horticulture, food and beverage industries.  Maintain appropriate industry regulatory functions and statutory funding for research and development.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.5: Horticulture Industry Annual administered expenses: Promoting Australian Produce Program 2,000 - - - - Regional Food Producers' Innovation and 5,500 5,800 - - - Productivity Program Special appropriations: Horticulture Marketing and Research 81,728 75,135 80,463 81,945 82,945 and Development Services Act 2000, s. Departmental expenses Departmental appropriation1 6,866 7,991 7,775 7,814 7,759 Expenses not requiring appropriation in 74 90 94 94 94 the budget year2 Total program expenses 96,168 89,016 88,332 89,853 90,798 1 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.5 Deliverables  The Regional Food Producers’ Innovation and Productivity Program provides matched-funding grants to food and seafood businesses to boost their productivity and competitiveness through innovation and technology improvements.  High level liaison and analysis of the horticulture and wine industries and provide policy advice.

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Program 1.5 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Manage existing grant deeds to 100% 100% Note1 Note1 Note1 project completion and program termination. Horticulture Australia Limited 100% 100% 100% 100% 100% compliance w ith the Statutory Funding Agreement and Grape and Wine Research and Development Corporation and Wine Australia Corporation compliance w ith statutory Meet w ith Horticulture Australia 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. Limited, Grape and Wine Research and Development Corporation, and Wine Australia Corporation to ensure compliance w ith Statutory Funding Agreements. All levy funds paid to Horticulture 100% 100% 100% 100% 100% Australia Limited, Grape and Wine Research and Development Corporation and Wine Australia Corporation. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved. 1 This program terminates at the end of 2011–12.

Note: Food security, previously in Program 1.5 is included in Program 1.10, Agricultural Resources.

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Contributions to Outcome 1 (continued)

Program 1.6: Wool Industry

Program objective  Assist primary producers to develop a more competitive, internationally focused and self-reliant wool industry.  Maintain appropriate industry regulatory functions and statutory funding for research and development.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.6: Wool Industry Special appropriations: Wool Services Privatisation Act 2000, s. 31(4) 51,305 53,800 53,200 52,800 52,800 Departmental expenses Departmental appropriation1 350 474 458 460 457 Expenses not requiring appropriation in the budget year2 4 5 6 6 6 Total program expenses 51,659 54,279 53,664 53,266 53,263 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.6 Deliverables  Provide high quality and timely policy advice and support to the minister on issues affecting the wool industry.  Consult industry stakeholders in the development of policy advice.  Ensure regulations meet the needs of the industry to maintain industry competitiveness for research and development, including administering woolpack regulations.  Inform the industry services body Australian Wool Innovation Limited of its obligations under the Statutory Funding Agreement and relevant legislation.

38 DAFF Budget Statements

Program 1.6 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Meet regularly w ith w ool 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. industry representative bodies to discuss policy issues. Requests under w oolpack 100% 100% 100% 100% 100% regulations are actioned. Action requests for w oolpack 95% 95% 95% 95% 95% imports w ithin 2 w orking days. Australian Wool 100% 100% 100% 100% 100% Innovation Limited compliance w ith Statutory Funding Agreement and relevant legislation. Meet w ith Australian Wool 4 meetings. 4 meetings. 4 meetings. 4 meetings. 4 meetings. Innovation Limited to discuss obligations under the Statutory Funding Agreement and relevant legislation. Levy payments made to Australian 100% 100% 100% 100% 100% Wool Innovation Limited in accordance w ith Statutory Funding Agreement. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

39 DAFF Budget Statements

Contributions to Outcome 1 (continued)

Program 1.7: Grains Industry

Program objective  Assist primary producers to develop a more competitive, internationally focused and self-reliant grain industry.  Maintain appropriate industry regulatory functions and statutory funding for research and development.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.7: Grains Industry Special appropriations: Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grains R&D Corporation – Other Grains 61,766 59,043 57,774 57,500 57,502 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grains R&D Corporation – Wheat 81,965 81,363 68,917 60,637 59,409 Departmental expenses Departmental appropriation1 2,721 1,997 1,929 1,939 1,925 Expenses not requiring appropriation in the budget year2 29 22 23 23 23 Total program expens es 146,481 142,425 128,643 120,099 118,859 1 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.7 Deliverables  Work with industry to identify and implement wheat market information arrangements.  Finalise Wheat Export Technical Market Support Grants.  Finalise and implement the government response to the Productivity Commission’s report on Wheat Export Marketing Arrangements.  Provide high level and timely policy advice and support to the minister on issues affecting the grains industry through liaison with relevant agencies and bodies including Wheat Exports Australia.

40 DAFF Budget Statements

Program 1.7 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget year 1 year 2 year 3 Government's obligations in 100% 100% 100% 100% 100% respect of the operation of the w heat export marketing arrangements and delivery of Meet w ith grains industry 3 meetings. 3 meetings. 3 meetings. 3 meetings. 3 meetings. representative bodies to discuss policy issues. Meet w ith Wheat Exports Australia 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. to monitor operation of Wheat Export Marketing Act 2008. Levy payments made in 100% 100% 100% 100% 100% accordance w ith statutory Meet w ith grains industry service 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. providers to review obligations under the statutory Grains Research and Development 100% 100% 100% 100% 100% Corporation's compliance w ith statutory responsibilities. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

41 DAFF Budget Statements

Contributions to Outcome 1 (continued)

Program 1.8: Dairy Industry

Program objective  Assist primary producers to develop a more competitive, internationally focused and self-reliant dairy industry.  Maintain appropriate industry regulatory functions and statutory funding for research and development.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.8: Dairy Industry Special appropriations: Dairy Produce Act 1986, s. 6(1) 51,524 46,283 47,287 48,633 49,891 Departmental expenses Departmental appropriation1 845 841 827 790 785 Expenses not requiring appropriation in the budget year2 9 9 10 9 10 Total program expenses 52,378 47,133 48,124 49,432 50,686 1 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.8 Deliverables  Provide high level and timely policy advice and support to the minister on issues affecting the dairy industry; including quota management.  Consult industry stakeholders in the development of policy advice.  Participate in Japan dairy talks on supply and demand.  Participate in China dairy talks on supply and demand.  Inform the industry services body Dairy Australia Limited of its obligations under the Statutory Funding Agreement and relevant legislation.  Ensure regulations meet the needs of the industry to maintain industry competitiveness for research and development and quota management.

42 DAFF Budget Statements

Program 1.8 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget year 1 year 2 year 3 Meet w ith dairy 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. industry representative bodies to discuss policy issues. Attend Japan dairy talks on supply 1 meeting. 1 meeting. 1 meeting. 1 meeting. 1 meeting. and demand. Attend China dairy talks on supply 1 meeting. No meeting 1 meeting. No meeting 1 meeting. and demand. held. held. Meet w ith Dairy Australia 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. Limited to discuss obligations under the Statutory Funding Agreement and relevant Provide the dairy industry w ith Monthly. Monthly. Monthly. Monthly. Monthly. regular feedback on quota Australia's international 100% 100% 100% 100% 100% quota obligations are met. Levy payments made in 100% 100% 100% 100% 100% accordance w ith Statutory Funding Agreement. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

43 DAFF Budget Statements

Contributions to Outcome 1 (continued)

Program 1.9: Meat and Livestock Industry

Program objective  Assist primary producers to develop a more competitive, internationally focused and self-reliant meat and livestock industry.  Maintain appropriate industry regulatory functions and statutory funding for research and development.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.9: Meat and Livestock Industry Special appropriations: Australian Meat and Live-stock Industry Act 1997, s. 63(2) – payments to the industry marketing body 74,732 75,786 77,397 78,582 79,643 Australian Meat and Live-stock Industry Act 1997, s. 64(2) – payments to the industry research body 24,179 24,293 25,411 25,772 26,082 Australian Meat and Live-stock Industry Act 1997, s. 64A(2) – payments to the livestock export marketing body 3,396 3,198 4,000 4,140 3,480 Australian Meat and Live-stock Industry Act 1997, s. 64B(2) – payments to the livestock export research body 849 800 802 830 870 Australian Meat and Live-stock Industry Act 1997, s. 64C(2) – payments to the meat processor marketing body 6,102 5,603 5,603 5,898 5,898 Australian Meat and Live-stock Industry Act 1997, s. 64D(2) – payments to the meat processor research body 11,127 10,106 10,106 10,638 10,638 Australian Meat and Live-stock Industry Act 1997, s. 66(1) – Commonw ealth contribution to industry research body 53,104 42,206 42,976 44,109 45,370 Pig Industry Act 2001, s. 10(1) 17,033 16,005 20,875 21,168 21,168 Departmental expenses Departmental appropriation1 1,868 1,649 1,616 1,626 1,615 Expenses not requiring appropriation in the budget year2 20 19 19 20 20 Total program expens es 192,410 179,665 188,805 192,783 194,784 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

44 DAFF Budget Statements

Program 1.9 Deliverables  Provide high level and timely policy advice and support to the minister on issues affecting the meat and livestock industries including quota management.  Consult industry stakeholders in the development of policy advice and quota management.  Ensure regulations meet the needs of the industry to maintain industry competitiveness for research and development and quota management.  Participate in Japan-Australia beef talks on supply and demand.  Inform the industry service bodies of their obligations under the Statutory Funding Agreements and relevant legislation.  Implement new Statutory Funding Agreements agreed with Australian Meat Processor Corporation, Meat and Livestock Australia and Australian Pork Limited.

Program 1.9 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget year 1 year 2 year 3 Meet w ith meat and livestock 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. industry representative bodies to discuss policy issues. Australia’s international quota 100% 100% 100% 100% 100% obligations are met. Red meat quota statistics are 100% 100% 100% 100% 100% accurately and regularly Provide the meat and livestock At least At least At least At least At least industry w ith regular feedback on w eekly. w eekly. w eekly. w eekly. w eekly. quota matters. Attend annual Japan-Australia 1 meeting. 1 meeting. 1 meeting. 1 meeting. 1 meeting. beef talks on supply and demand. Meet w ith Australian Pork Limited, 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. Meat and Livestock Australia, Australian Meat Processor Corporation and Australian Livestock Export Corporation to discuss obligations under their agreements and relevant Levy payments made in 100% 100% 100% 100% 100% accordance w ith Statutory Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

45 DAFF Budget Statements

Contributions to Outcome 1 (continued) Program 1.10: Agricultural Resources

Program objective  Enhance the evidence-based information available to government and external decision-makers by providing analysis and research on agricultural and primary industries, food, markets, products and environmental sustainability.  Assist primary producers to develop a more competitive, internationally focused and self reliant industries.  Assist industry to improve its productivity, sustainability and ability to adapt to climate change through the provision of research, analysis, tools, funding and other support for research, development and extension, and food regulation.  Improved animal welfare outcomes, including for the export of livestock by coordinated action at the national and international levels.  Support the development of a National Food Plan.  Maintain appropriate industry regulatory functions and statutory funding for research and development.  Provide advice and support to the minister on policy and reform matters relating to the National Registration Scheme for agricultural and veterinary chemicals.

46 DAFF Budget Statements

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.10: Agricultural Resources Annual administered expenses: Agricultural and Veterinary Chemicals Minor Use Program1 - 135 140 143 146 Australian Animal Welfare Strategy1 - 991 1,013 1,033 1,056 Centre of Excellence for Biosecurity Risk Analysis and Research2 1,687 - - - - Northern Australia Beef Industry Strategy – Indigenous Pastoral Project 250 250 - - - Promoting Australian Produce Program – Major Events 3,000 - - - - Rural Industries Research and Development Corporation 10,514 10,774 11,071 11,291 11,539 Special appropriations: Egg Industry Service Provision Act 2002, s. 8(1) 7,983 8,946 9,301 9,670 10,054 Financial Management and Accountability Act 1997, s. 28(2) – payment of refunds not elsew here 6,412 2,000 2,000 2,000 2,000 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Cotton R&D Corporation 12,768 14,819 12,618 10,172 8,055 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grape and Wine R&D Corporation 27,828 24,728 23,351 22,708 22,708 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Rural Industries R&D Corporation 5,587 7,190 7,053 7,193 7,337 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Sugar R&D Corporation 10,790 9,644 8,442 8,820 8,960 Wine Australia Corporation Act 1980, s. 5,307 4,936 5,119 5,119 5,119 Departmental expenses Departmental appropriation3 59,695 60,805 59,815 59,714 59,301 Expenses not requiring appropriation in the budget year4 644 683 721 716 722 Total program expens es 152,465 145,901 140,644 138,579 136,997 1 The Agricultural and Veterinary Chemicals Minor Use Program and the Australian Animal Welfare Strategy items have been moved to Program 1.10 from 1 July 2011 onwards. The estimated actuals for 2010–11 are reflected in Program 2.2. 2 The Centre of Excellence for Biosecurity Risk Analysis and Research item has been moved to Program 2.1 from 1 July 2011 onwards. 3 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 4 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

47 DAFF Budget Statements

Program 1.10 Deliverables Research and Advice  Delivery of economic and scientific information relevant to government and other stakeholders.  Published economic analysis, forecasts and data.  Improved research tools for decision making. Agricultural Productivity  Regulations that meet the needs of the industry to maintain industry competitiveness.  Progress with the states and territories on priority issues identified by the Primary Industries Ministerial Council in the fields of research and development, product integrity, animal welfare, national food policy and industry development.  Information and guidance to industry service bodies (Australian Egg Corporation Ltd, Sugar Research and Development Corporation, Cotton Research and Development Corporation and the Rural Industries Research and Development Corporation) about the government’s rural research and development priorities.  Compliance by industry services bodies (Australian Egg Corporation Ltd, Sugar Research and Development Corporation, Cotton Research and Development Corporation and the Rural Industries Research and Development Corporation) with their obligations under the Statutory Funding Agreements or legislation.  High level and timely policy advice and support to the minister on issues affecting the sugar, cotton, egg, game and intensive livestock and new rural industries.  A new Statutory Funding Agreement with the Australian Egg Corporation Ltd.  Progress with the Northern Australia Sustainable Futures Program, including the Northern Australia Beef Industry Strategy program to provide improved opportunities for indigenous engagement in the pastoral industry.  Policy and secretariat support to the Rural R&D Council.  A government response to the report of the Productivity Commission’s Inquiry into Rural Research and Development Corporations.  Advice and support to the minister on research and development (R&D) policy and governance matters; and new and emerging technologies, including the use and potential of biotechnology and nanotechnology applications in portfolio industries.  Advice to the minister on the effects of reduced water availability on irrigated industries.  Contribution to whole-of-government consideration of water and irrigation policies and programs. Animal Welfare

 High quality and timely policy advice and support to the minister on animal welfare issues.  Effective and efficient implementation of the Australian Animal Welfare Strategy (AAWS).  Contribution to the development of international animal welfare guidelines, capacity building, research and training on animal welfare issues.

48 DAFF Budget Statements

Food and Food Regulation Policy  An annual Australian Food Statistics publication.  Support for the implementation of the Australian Standard for Organic and Biodynamic Produce.  Participation in the development of Commonwealth and Ministerial Council responses to the Review of Food Labelling Law and Policy.  High quality and timely advice and support for the minister and executive on food, food security, food supply chain resilience and related issues.  Collaboration with the Department of Health and Ageing to develop Australian government positions on food regulatory policy and food standards notifications.  Agreed Australian Government positions on international food standards issues for negotiation in international fora.

 Development and release of a National Food Plan. Agricultural and Veterinary (agvet) Chemicals  Development and introduction into the Parliament of legislation to implement reforms to the Australian Pesticides and Veterinary Medicines Authority.  Advice to the Council of Australian Governments (COAG) on reforms to the national agvet chemicals system in partnership with the states and territories.  Management of Australia’s agvet chemical responsibilities under international chemical conventions.  Provision of funding to the Australian Pesticides and Veterinary Medicines Authority to assist in the processing of permits for minor use of agvet chemicals.

49 DAFF Budget Statements

Program 1.10 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Research and Advice Research, advice, forecasts, 85% 85% 85% 85% 85% projects, products and data services are provided on time. Research, advice, forecasts, 85% 85% 85% 85% 85% projects, products and data services are provided w ithin Client satisfaction w ith research, 90% 90% 90% 90% 90% advice, forecasts, projects, products and data services. Agricultural Productivity Timely assessment and reporting 100% 100% 100% 100% 100% on industry competitiveness and adjustment issues. Timely contribution to the 100% 100% 100% 100% 100% development of Australian animal w elfare standards and guidelines for production and non-production animals. Australian Egg Corporation Limited 100% 100% 100% 100% 100% and Rural Industries, Sugar and Cotton Research and Development Corporations’ compliance w ith Statutory Funding Agreements and relevant legislation. Meet regularly w ith sugar, cotton, 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. egg, game and intensive livestock and new industry representative bodies to discuss policy issues. All levy payments made in 100% 100% 100% 100% 100% accordance w ith Statutory Funding Agreements and Meet w ith industry service 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. providers to discuss obligations under the Statutory Funding Agreements and relevant A new Statutory Funding - New SFA - - - Agreement (SFA) w ith the agreed. Australian Egg Corporation Limited

50 DAFF Budget Statements

2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Indicators (continued) budget target year 1 year 2 year 3 Anim al w elfare Deliver the government's funding 100% 100% 100% 100% 100% contribution to continue implementation of the Australian Animal Welfare Strategy. Food Regulation Policy Contribute to the development of 100% 100% 100% 100% 100% an Australian Government response to the Review of Food Labelling Law and Policy. Contribute to the development of 100% 100% 100% 100% 100% Australian Government positions on proposed amendments to the Australia New Zealand Food Standards Code. Food Policy Publish Australian Food Statistics 100% 100% 100% 100% 100% by February each year. Attend meetings of Standards 2 meetings. 2 meetings. 2 meetings. 2 meetings. 2 meetings. Australia committee FT-032 Organic and Biodynamic Products w ith the representative organisation, the Organic Completion and publication of - 100% 100% 100% 100% factual and policy documents for the National Food Plan. Agricultural and Veterinary Chem icals Meet regularly w ith state and 4 meetings. 4 meetings. 4 meetings. 4 meetings. 4 meetings. territory representatives to progress and implement policy reforms and legislative change. Attend international chemical 3 meetings. 3 meetings. 3 meetings. 3 meetings. 3 meetings. fora in keeping w ith Australia’s international obligations. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

51 DAFF Budget Statements

Contributions to Outcome 1 (continued)

Program 1.11: Drought Programs

Program objective  Support eligible farmers and small businesses with targeted assistance during exceptional circumstances events, including drought.  Increase the resilience and capacity of farmers, farming families and their communities to better prepare for and self-manage the impacts of drought, climate variability and reduced water availability.

Linked to:  Farm Household Support Act 1992, s. 57(3) – Exceptional Circumstances Relief Payments delivered by Centrelink.  Exceptional Circumstances – Treasury Program 1.10 National Partnership Payments to the States.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.11: Drought Program s Annual administered expenses: Drought Assistance – Interim Income Support Payments 1,094 - - - - Drought Assistance – Professional 15,500 - - - - Drought Assistance – Re-establishment Assistance 24,000 9,613 - - - Drought policy reform – pilot of new measures in Western Australia 4,221 13,145 - - - Special appropriations: Farm Household Support Act 1992, s. 57(3) – Exceptional Circumstances Relief Payments 152,035 8,379 - - - Departmental expenses Departmental appropriation1 7,626 6,929 6,050 6,081 6,038 Expenses not requiring appropriation in the budget year2 82 78 73 73 73 Total program expens es 204,558 38,144 6,123 6,154 6,111 1 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

52 DAFF Budget Statements

Program 1.11 Deliverables  Payments made to applicants who are eligible for assistance according to protocols and guidelines are correctly assessed and made for the following sub-program activity: - Drought Assistance – Re-establishment Assistance.

 Quantitative and qualitative information on the achievement of deliverables and services will be obtained through client surveys, performance audits and program reviews.  Roll out of trial drought reform measures as part of Western Australian Pilot in accordance with the requirements and timetable agreed in the National Partnership Agreement on the Pilot of Drought Reform Measures in Western Australia.

53 DAFF Budget Statements

Program 1.11 Key Performance Indicators  The drought reform pilot informs the development of new national measures that will increase the resilience and capacity of farmers, farming families and their communities to better prepare for and self-manage the impacts of drought, climatic variability and reduced water availability.  The review of the drought reform pilot and stakeholder assessments demonstrate that the pilot of drought reform measures in Western Australia is enhancing the understanding of potential drought reform measures. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators1 budget target year 1 year 2 year 3 Eligible applicants (farmers and 100% 100% - - - small businesses) receive sufficient financial resources to meet immediate needs w ithin timeframe specified by the Interim Incom e Support Interim Income Support claims to 80%2 Note3 Note3 - - be processed w ithin 42 days in accordance w ith the Business Partnership Agreement w ith Centrelink. Farm Household Support Act 1992, s. 57(3) – Exceptional Circum stances Relief ECPaym Relief ents Payment claims to be 80% 80% Note4 - - processed w ithin 42 days in accordance w ith the Business Partnership Agreement w ith Centrelink. Drought Assistance – re- establishm ent grant Grant claims to be processed 80% 80% - - - w ithin 91 days in accordance w ith the Protocol agreed w ith Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved. 1 Changes have been made to key performance indicators to clarify the linkages between objectives, deliverables and key performance indicators. Achievement against previous indicators will be published in the DAFF Annual Report. 2 There are no Interim Income Support (IIS) payments currently being made, however the performance indicator remains valid as IIS payments could be made during 2010–11 if an area is declared. 3 There are no forward estimates from 2011–12 onwards for Interim Income Support as there are no EC declared declarations that currently extend beyond March 2012. 4 There are no forward estimates from 2012–13 onwards for the related administered programs as there are no EC declared declarations that currently extend beyond March 2012. For any EC areas that are subsequently declared or extended additional funds will be provided.

54 DAFF Budget Statements

Contributions to Outcome 1 (continued)

Program 1.12: Rural Programs

Program objective Support eligible primary producers and small rural businesses with targeted assistance to manage adjustment pressures and remain viable in the long-term.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.12: Rural Program s Annual administered expenses: Rural Financial Counselling Service 12,820 13,322 13,615 13,887 14,193 Departmental expenses Departmental appropriation1 1,947 2,094 2,023 2,033 2,019 Expenses not requiring appropriation in the budget year2 21 24 24 24 25 Total program expenses 14,788 15,440 15,662 15,944 16,237 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.12 Deliverables Pay rural financial counselling organisations to deliver services to eligible clients in accordance with appropriate governance arrangements. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Through the Rural Financial 14 service 14 service 14 service 14 service 14 service Counselling Service Program providers. providers. providers. providers. providers. provide funds to service

Program 1.12 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year1 year 2 year 3 Third parties deliver the services 100% 100% 100% 100% 100% and acquit the funds in accordance w ith the relevant governance documentation. Third parties deliver services 100% 100% 100% 100% 100% specified in the governance Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

55 DAFF Budget Statements

Contributions to Outcome 1 (continued)

Program 1.13: International Market Access

Program objective Maintain and improve international market access opportunities for Australia’s food, fisheries and forestry industries.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 1.13: International Market Annual administered expenses: AAA – International Agricultural 832 859 876 890 909 Food and Agriculture Organization of the United Nations (FAO) 12,531 12,531 12,531 12,531 12,531 International Organisations Contributions 1,667 1,698 1,737 1,771 1,812 Live Trade Animal Welfare Partnership 550 550 - - - Departmental expenses Departmental appropriation1 34,892 35,060 34,317 34,351 34,112 Expenses not requiring appropriation in the budget year2 377 394 414 412 415 Total program expens es 50,849 51,092 49,875 49,955 49,779 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 1.13 Deliverables  Maximise market access opportunities and counter market access threats for portfolio industries in bilateral, regional and multilateral trade.  Build relationships with trading partners that can be called upon to help resolve trade issues.  Provide targeted agricultural cooperation and technical assistance to support market access objectives.  Ensure portfolio interests are reflected in bilateral and multilateral agreements, as well as in international organisations and standards relating to animal, plant, food products and environmental health and sustainability.

56 DAFF Budget Statements

2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Agriculture Advancing Australia – International Agricultural Cooperation Deliver capacity - 10-15 10-15 10-15 10-15 building/cooperation projects in Projects. Projects. Projects. Projects. trading partner's countries under Paym e nts to International Organisations Maintain effective distribution of - 100% of 100% of 100% of 100% of membership funds to International funds funds funds funds Organisations. distributed. distributed. distributed. distributed. Live Trade Anim al Welfare Partnership Fully allocate funds to deliver - 100% of - - - capacity building and technical funds assistance projects to improve allocated. animal w elfare in the Middle East and South East Asian countries through the Live Trade Animal Overseas Netw ork - 13 posts. 13 posts. 13 posts. 13 posts. Maintain a netw ork of - 18 key 18 key 18 key 18 key DAFF officers overseas. overseas overseas overseas overseas markets. markets. markets. markets.

Program 1.13 Key Performance Indicators  Maintain or improve market access with key trading partners.  Achieve new market access opportunities.  Reflect portfolio interests in new bilateral/multilateral agreements and international standards relating to animal, plant, food products, and environmental health and sustainability. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year1 year 2 year 3 Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice and support. achieved. achieved. achieved. achieved.

57 DAFF Budget Statements

Outcome 2: Safeguard Australia’s animal and plant health status to maintain overseas markets and protect the economy and environment from the impact of exotic pests and diseases, through risk assessment, inspection and certification, and the implementation of emergency response arrangements for Australian agricultural, food and fibre industries. Outcome 2 Strategy Contributions to achieving this outcome during 2011–12 will include:  developing and implementing approaches to manage Australia’s biosecurity system on a risk return basis

 strengthening Australia’s biosecurity system in partnership with the states, territories, industry and the broader community, through improved working arrangements that are underpinned by robust assessments and efficient management of risk

 safeguarding the economy and environment from the impact of exotic pests and diseases by delivering effective and efficient national biosecurity services underpinned by improved systems and facilities

 strengthening Australia’s animal and plant pest and disease prevention, preparedness and response capability through capacity building in other countries, improving diagnostic, analytic, surveillance and intelligence capabilities, including the ability to scan the horizon for new and emerging threats to Australia’s animals and plants and the natural environment from within Australia and with our near neighbours

 representing Australia’s biosecurity interests through participation in international forums and compliance with international obligations.

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Outcome 2 Expense Statement Table 2.1 provides an overview of the total expenses for outcome 2 by program.

Table 2.1: Budgeted Expenses for Outcome 2 Outcom e 2: Safeguard Australia's anim al and plant health 2010–11 2011–12 status to m aintain overseas m arkets and protect the Estimated Estimated econom y and environm ent from the im pact of exotic pests actual expenses and diseases, through risk assessm ent, inspection and expenses certification, and the im plem entation of em ergency response arrangem ents for Australian agricultural, food and $'000 $'000 Program 2.1: Quarantine and Export Services Administered expenses Ordinary annual services (Appropriation Bill No. 1) Centre of Excellence for Biosecurity Risk Analysis and Research1 - 1,719 Beyond the Border: Australia's Biosecurity Strategy – Post Entry Quarantine – Communications - 400 Export Certification Reform Package 6,600 - Special appropriations National Residue Survey Administration Act 1992, s. 6 10,260 9,493 National Residue Survey Administration Act 1992, s. 6 – transfer to departmental special account (10,260) (9,493) Departmental expenses Departmental appropriation2 205,416 144,280 Special accounts Australian Quarantine and Inspection Service Special Account – s. 20, FMA Act 1997 255,634 285,203 National Residue Survey Account – s. 6, National Residue Survey Administration Act 1992 10,450 10,189 Expenses not requiring appropriation in the budget year3 5,091 4,938 Total for Program 2.1 483,191 446,729 Program 2.2: Plant and Anim al Health Administered expenses Ordinary annual services (Appropriation Bill No. 1) Agricultural and Veterinary Chemicals Minor Use Program4 133 - Animal Biosecurity & Response Reform 870 906 Australian Animal Welfare Strategy4 973 - Commonw ealth contribution to the operating costs of Animal Health Australia 1,243 1,266 International Organisations Contribution – World Organisation for Animal Health 228 233 Other Exotic Disease Preparedness Program 568 580 Payment to CSIRO – Contribution to the operating costs of the Australian Animal Health Laboratory 7,252 7,391 Plant Biosecurity & Response Reform 2,639 2,703 Quarantine Research and Preparedness Plan 1,200 - Program 2.2 carried forw ard 15,106 13,079 Continued on following page

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Table 2.1: Budgeted Expenses for Outcome 2 2010–11 2011–12 Estimated Estimated actual expenses expenses $'000 $'000 Special appropriations Australian Animal Health Council (Live–stock Industries) Funding Act 1996, s. 5 6,296 6,312 Plant Health Australia (Plant Industries) Funding Act 2002, s. 6 1,381 1,072 Plant Health Australia (Plant Industries) Funding Act 2002, s. 419 430 Departmental expenses Departmental appropriation2 42,610 41,452 Expenses not requiring appropriation in the budget year3 460 466 Total for Program 2.2 66,272 62,811 Outcom e 2 Totals by appropriation type Administered expenses Ordinary annual services (Appropriation Bill No. 1) 21,706 15,198 Special appropriations 8,096 7,814 Departmental expenses Departmental appropriation2 248,026 185,732 Special accounts 266,084 295,392 Expenses not requiring appropriation in the budget year3 5,551 5,404 Total expenses for Outcom e 2 549,463 509,540

2010–11 2011–12 Estimated Estimated actual Budget Average Staffing Level (num ber) 3,727 3,736 1 Centre of Excellence for Biosecurity Risk Analysis and Research has been moved to Program 2.1 from 1 July 2011 onwards. The estimated actual for 2010–11 is reflected in Program 1.10. 2 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 3 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees. 4 The Agricultural and Veterinary Chemicals Minor Use Program and the Australian Animal Welfare Strategy items have been moved to Program 1.10 from 1 July 2011 onwards.

Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change.

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Contributions to Outcome 2

Program 2.1: Quarantine and Export Services

Program objective To support access to overseas markets and protect the economy and the environment from the impacts of unwanted pests and diseases through the safe movement to and from Australia of animals, plants and their products, including genetic material, people and cargo. The focus for 2011–2012 is to:  Strengthen Australia’s biosecurity system across the continuum.  Deliver effective biosecurity services.  Development of closer partnerships to deliver better biosecurity outcomes. Linked to: Australian Customs and Border Protection Service – Passenger facilitation (Program 1.1) and Trade facilitation (Program 1.2).

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 2.1: Quarantine and Export Annual administered expenses: Centre of Excellence for Biosecurity Risk Analysis and Research1 - 1,719 1,757 1,793 1,832 Beyond the Border: Australia's Biosecurity Strategy – Post Entry Quarantine – Communications - 400 - - - Export Certification Reform Package 6,600 - - - - Special appropriations: National Residue Survey Administration Act 1992, s. 6 10,260 9,493 9,796 9,880 9,987 National Residue Survey Administration Act 1992, s. 6 – transfer to departmental special account (10,260) (9,493) (9,796) (9,880) (9,987) Departmental expenses Departmental appropriation2 205,416 144,280 112,435 112,081 105,435 Special accounts Australian Quarantine and Inspection Service Special Account – s. 20, FMA Act 1997 255,634 285,203 290,113 293,496 292,732 National Residue Survey Account – s. 6, National Residue Survey Administration Act 1992 10,450 10,189 10,871 10,950 11,037 Expenses not requiring appropriation in the budget year3 5,091 4,938 4,981 4,996 4,978 Total program expens es 483,191 446,729 420,157 423,316 416,014

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1 Centre of Excellence for Biosecurity Risk Analysis and Research has been moved to Program 2.1 from 1 July 2011 onwards. The estimated actual for 2010–11 is reflected in Program 1.10.

2 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 3 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 2.1 Deliverables Key program deliverables for the Quarantine and Export Services Program in 2011–12 include: Strengthen Australia’s biosecurity system across the continuum  Develop an agreed implementation plan for biosecurity reform.  Integrate biosecurity activities, scientific capabilities and analysis across the biosecurity continuum.  Draft and implement new biosecurity legislation.  Strengthen partnerships between all governments in Australia and of other countries, industry and the broader community and in line with government priorities.  Continue a risk based intervention strategy for vessels, sea and air cargo, international passengers and mail, supported by information and communication technology (ICT) systems and appropriate skills to optimise the deployment of resources to provide the greatest benefit to Australia’s biosecurity status.  Evaluate and encourage industry and other agencies compliance with third party arrangements underpinned by appropriate audit assessments.  Improving partnerships at the border and across the biosecurity system. Deliver effective biosecurity services  Perform robust science based import risk analyses (IRAs) and biosecurity risk assessments.  Supporting access to overseas markets for Australian exporters by providing scientific and technical advice, performing inspections and issuing export certification.  Effective national biosecurity services for the clearance of imported goods, vessels and people.  Implement the Australian Government’s requirements for the future of Australia’s animal and plant post entry quarantine facilities.  Develop and complete an information and communications technology (ICT) second pass business case to support reform.

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Program 2.1 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Implementation of risk-based Develop, Implement, Implement, Monitor and Monitor and initiatives for sea cargo, air cargo implement, monitor and monitor and review risk- review risk- vessels, international passengers monitor and review risk- review risk- based based and mail. review risk- based based intervention intervention based intervention intervention and and intervention and and operational operational and operational operational profiling profiling operational profiling profiling arrange- arrange- profiling arrange- arrange- ments. ments. arrangements. ments. ments. Drafting and implementation of Drafting of Develop- Develop- Commence- Ongoing new biosecurity legislation in line new ment and ment of ment of monitoring w ith requirements. biosecurity implement- subordinat new of the bill. ation of a e legislation legislation. effective- supporting and ness of, training continuing and package. implement- ongoing ation of interpret- supporting ation of, training the new package. legislative Develop initiatives to enable reform Successful Successful Implement Implement Implement of Australia's biosecurity ICT completion completion ICT ICT ICT systems. of and of ICT initiatives initiatives initiatives governmen second w ith w ith w ith t pass in line ongoing ongoing ongoing agreement w ith monitoring monitoring monitoring to first governmen to ensure to ensure to ensure pass t require- implement- implement- implement- business ments by ation ation ation case. December remains remains remains 2012. aligned aligned aligned Work closely w ith industry to bed Engage Engage Engage Engage Engage dow n reforms. and partner and partner and partner and partner and partner w ith w ith w ith w ith w ith stakeholder stakeholder stakeholder stakeholder stakeholder s to s to s to s to s to improve improve improve improve improve

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2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators (continued) budget target year 1 year 2 year 3 Revised arrangements for post Options for Implement- Agreed Agreed Agreed entry quarantine facilities future ation of the milestones milestones milestones implemented. arrange- govern- met. met. met. ments for ment's post-entry require- facilities ments are regarding identified post entry for quarantine governmen arrange- t consider- ments in ation. alignment w ith agreed Markets lost as a consequence of 0 0 0 0 0 failed Australian Quarantine and Inspection Service (AQIS) certification services. Export consignments 0 0 0 0 0 rejected because of certification issues. Proportion of Import Risk Analyses 100% 100% 100% 100% 100% conducted in accordance w ith biosecurity regulations and appeals disallow ed or found to be outside scope. Number of expanded IRAs 100% 100% 100% 100% 100% supported by the Eminent Scientists Group. Development of closer Trial and Develop, Develop, Develop, Ongoing partnerships at the border to evaluate implement, implement, implement, support for deliver better biosecurity partnership monitor and monitor and monitor and closer outcomes. initiatives at review review review partnership the border. partnership partnership partnership s at the arrange- arrange- arrange- border. ments at ments at ments at the border. the border. the border. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice, scientific advice and achieved. achieved. achieved. achieved.

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Contributions to Outcome 2 (continued)

Program 2.2: Plant and Animal Health

Program objective To support access to overseas markets and protect the economy and the environment from the impacts of unwanted pests and diseases through the safe movement to and from Australia of animals, plants and their products, including genetic material, people and cargo. The focus for 2011–2012 is to:  Strengthen Australia’s biosecurity system to enhance national capacity to manage pest and disease risk.  Enhance Australia’s biosecurity interests in international forums.

Linked to:  Other Exotic Disease Preparedness and Exotic Disease Preparedness programs – Treasury Program 1.10 National Partnership Payments to the States.  Plant Disease and Eradication – Treasury Program 1.10 National Partnership Payments to the States.

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Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Program 2.2: Plant and Anim al Health Annual administered expenses: Agricultural and Veterinary Chemicals Minor Use Program1 133 - - - - Animal Biosecurity & Response Reform 870 906 - - - Australian Animal Welfare Strategy1 973 - - - - Commonw ealth contribution to the operating costs of Animal Health 1,243 1,266 1,294 1,319 1,347 International Organisations Contribution – World Organisation for Animal Health 228 233 237 242 247 Other Exotic Disease Preparedness 568 580 591 604 618 Payment to CSIRO – Contribution to the operating costs of the Australian Animal Health Laboratory 7,252 7,391 7,553 7,703 7,873 Plant Biosecurity & Response Reform 2,639 2,703 - - - Quarantine Research and Preparedness 1,200 - - - - Special appropriations Australian Animal Health Council (Live- stock Industries) Funding Act 1996, s. 5 6,296 6,312 6,479 6,580 6,671 Plant Health Australia (Plant Industries) Funding Act 2002, s. 6 1,381 1,072 924 888 894 Plant Health Australia (Plant Industries) Funding Act 2002, s. 10B 419 430 356 338 341 Departmental expenses Departmental appropriation2 42,610 41,452 35,894 36,029 35,777 Expenses not requiring appropriation in the budget year3 460 466 433 432 435 Total program expens es 66,272 62,811 53,761 54,135 54,203 1 The Agricultural and Veterinary Chemicals Minor Use Program and the Australian Animal Welfare Strategy items have been moved to Program 1.10 from 1 July 2011 onwards. 2 Departmental Appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 3 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense and audit fees.

Program 2.2 Deliverables Key program deliverables for the Animal and Plant Health Program in 2010–11 include:  Strengthen Australia’s biosecurity system to enhance national capacity to manage pest and disease risk.  Continue to reform Australia’s biosecurity system to integrate biosecurity activities, scientific capabilities and analysis across the biosecurity continuum, supported by strengthened partnerships between all governments in Australia and of other countries, industry and the broader community and in line with government priorities.  Provide scientific and policy enhancements to strengthen Australia’s pest and disease prevention, preparedness and response capabilities.

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 Provide effective leadership and management of responses to emergency and re/emerging diseases, including providing effective technical, policy, training and funding support for national animal diseases emergency management.  Strengthen surveillance efforts across the biosecurity continuum by working closely with the states’ and territories’ surveillance networks to detect pests and diseases of concern.  Enhance national animal and plant surveillance arrangements, tools and diagnostic capability to underpin Australia’s quarantine policies in support of market access and trade.  Build collaborative and strategic partnerships with other countries to deliver capacity building projects that assist our near-neighbours to manage pests and diseases effectively.  Enhance Australia’s interests in international biosecurity forums.  Represent Australia’s interests in the development of domestic and international standards for animal and plant health to meet Australia’s international obligations for disease reporting and to manage domestic animal and plant health.  Maintain currency of AUSVETPLAN, AQUAVETPLAN and PLANTPLAN.

Program 2.2 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Responses to pest and disease All All All All All incursions and outbreaks are incursions incursions incursions incursions incursions managed according to relevant and and and and and framew orks. outbreaks outbreaks outbreaks outbreaks outbreaks managed managed managed managed managed w ithin w ithin w ithin w ithin w ithin framew ork framew ork framew ork framew ork framew ork Reports provided to international All reports All reports All reports All reports All reports bodies provide up-to-date provide up- provide up- provide up- provide up- provide up- information on Australia's animal, to-date to-date to-date to-date to-date plant and marine health status, as information information information information information required by international at the time at the time at the time at the time at the time agreements. of of of of of Fund key national surveillance, 100% 100% 100% 100% 100% response and diagnostic Deliver capacity building projects Agreed Agreed Agreed Agreed Agreed to the Asia-Pacific region, to milestones milestones milestones milestones milestones manage pests and diseases. met. met. met. met. met. Representation of Australia’s 100% 100% 100% 100% 100% view s at relevant standard setting AUSVETPLAN, AQUAVETPLAN All plans All plans All plans All plans All plans and PLANTPLAN reflect current reflect reflect reflect reflect reflect science of emergency animal current current current current current diseases and emergency plant science. science. science. science. science. Minister/Parliamentary Secretary - High level High level High level High level and executive satisfied w ith the of of of of quality and timeliness of policy satisfaction satisfaction satisfaction satisfaction advice, scientific advice and achieved. achieved. achieved. achieved.

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Section 3: Explanatory tables and budgeted financial statements

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the 2011–12 budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, special accounts and government indigenous expenditure.

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years The department does not have any movement of administered funds.

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3.1.2 Special accounts Special accounts provide a means to set aside and record amounts used for specified purposes. Special Accounts can be created by a Finance Minister’s Determination under the Financial Management Accountability Act 1997 or under separate enabling legislation. Table 3.1.1 shows the expected additions (receipts) and reductions (payments) for each account used by the department.

Table 3.1.1: Estimates of special account flows and balances Opening Closing balance Receipts Payments Adjustments balance 2011–12 2011–12 2011–12 2011–12 2011–12 2010–11 2010–11 2010–11 2010–11 2010–11 Outcome $'000 $'000 $'000 $'000 $'000 Forestry Fund Account – s. 5, 1 - - - - - Forestry and Timber Bureau - - - - - Act 1930 (A) National Cattle Disease 1 15 - - - 15 Eradication Account – s. 4, 15 - - - 15 National Cattle Disease Eradication Account Act 1991 (A) Natural Resources 1 8,679 37,123 45,802 - - Management Account – s. 11, 10,415 38,983 40,719 - 8,679 Natural Resources Management (Financial Assistance) Act 1992 (A) Australian Quarantine and 2 24,722 413,953 405,893 - 32,782 Inspection Service Special 13,576 476,331 465,185 - 24,722 Account – s. 20, FMA Act 1997 (D) National Residue Survey 2 18,393 10,745 12,232 - 16,906 Account – s. 6, National 19,755 11,002 12,364 - 18,393 Residue Survey Administration Act 1992 (D) Services for Other - - - - - Governments and Non- 495 - 495 - - Agency Bodies Account – s. Other Trust Monies Account - - - - - – s. 20, FMA Act 1997 - - - - - Total special accounts 51,809 461,821 463,927 - 49,703 2011–12 Budget estim ate Total special accounts 44,256 526,316 518,763 - 51,809 2010–11 estimated actual (A) = Administered (D) = Departmental

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3.1.3 Australian Government Indigenous Expenditure

Table 3.1.2: Australian Government Indigenous Expenditure Approp Approp Special Total Bill No. 1 Bill No. 2 Approp Approp Program $'000 $'000 $'000 $'000 Departm ent of Agriculture, Fisheries and Forestry Outcom e 1 Administered 2011–12 Tackling Climate Change – Australia's Farming Future – Climate Change 450 - - 450 1.1 Agricultural Resources 250 - - 250 1.10 Administered 2010–11 Tackling Climate Change – Australia's Farming Future – Climate Change 909 - - 909 1.1 Agricultural Resources 250 - - 250 1.10 Departmental 2011–12 Forestry Industry 140 - - 140 1.3 Departmental 2010–11 Forestry Industry 140 - - 140 1.3 Total outcom e 1 2011–12 840 - - 840 Total outcome 1 2010–11 1,299 - - 1,299

Total adm iniste red 2011–12 700 - - 700 Total administered 2010–11 1,159 - - 1,159 Total departm ental 2011–12 140 - - 140 Total departmental 2010–11 140 - - 140 Total AGIE 2011–12 840 - - 840 Total AGIE 2010–11 1,299 - - 1,299

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3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Differences in agency resourcing and financial statements The financial statements are prepared on an accrual basis where revenues and expenses are recognised as and when the resources are received and used. The agency resourcing table recognises the cash resources available to be used during the period and includes amounts recognised as revenue in previous periods.

3.2.2 Analysis of budgeted financial statements An analysis of the primary causes of movements in the budgeted financial statements and administered schedules is provided below. The 2010–11 estimated actual results are used as the comparative year in the analysis.

Departmental Income statement

The department is budgeting to break even for the 2011–12 financial year after allowing for the financial impact of the net cash appropriation arrangements. In 2010–11 the department is budgeting for a surplus of $11.1 million. The surplus is due to an anticipated underspend against the amount of fees received by the cargo operations unit within AQIS. The surplus will be used to offset the costs of cargo operations in future years.

Total expenses are estimated to be $656.3 million. This represents a decrease of $26.3 million from the 2010–11 estimated actual results. The change is primarily due to a decrease in employee expenses. The increase in revenue from sales of goods and services from 2011–12 onwards and the associated reduction in revenue from government, relates to the introduction of full cost recovery for export certification services provided by AQIS.

Balance sheet

The budgeted net asset position for 2011–12 of $100.7 million represents an increase of $20.5 million from the 2010–11 estimated actual. The increase is primarily due to an equity injection of $13.7 million for AQIS quarantine facilities and the financial impact of the net cash appropriation arrangements. Under the net cash arrangements the department will receive an equity injection of $11.8 million for the purchase of non- financial assets which is offset by unfunded depreciation expenses of $5.5 million.

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Administered Income and expenses

It is estimated that the department will receive non-appropriation revenue on behalf of the government of $390.8 million, an increase of $7.8 million from the 2010–11 estimated actual. The change is primarily due to an increase in levies received from the wheat, coarse grains and wool industries.

Administered expenses are estimated to be $782.6 million, a decrease of $239.0 million from the 2010–11 estimated actual. The change is primarily related to a decrease in drought assistance and exceptional circumstances relief payments due to a reduction in the number of drought declared areas and the completion of the exit grants scheme for the Tasmanian forest industry.

Assets and liabilities

Administered assets as at 30 June 2012 are estimated to be $263.5 million, a decrease of $8.7m from the 2010–11 estimated actual. The change is due to a reduction in the Natural Resource Management Special Account balance.

Administered liabilities as at 30 June 2012 are estimated to be $70.6 million, a decrease of $2.3 million from the 2010–11 estimated actual. The change is due to a reduction in personal benefits payable.

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3.2.3 Budgeted financial statements tables Table 3.2.1 Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 474,168 447,749 423,179 425,502 420,773 Supplier expenses 188,068 186,313 164,856 165,308 161,392 Grants 3,500 3,500 3,500 3,500 3,500 Depreciation and amortisation 16,282 18,198 19,014 19,191 19,191 Finance costs 500 500 500 500 500 Total expenses 682,518 656,260 611,049 614,001 605,356 LESS: OWN-SOURCE INCOME Ow n-source revenue Sale of goods and rendering of services 317,499 338,024 341,066 340,139 333,559 Other fees from regulatory services 10,450 10,189 10,871 10,950 11,037 Interest 1,300 1,300 1,300 1,300 1,300 Other 2,750 2,750 2,750 2,750 2,750 Total ow n-source revenue 331,999 352,263 355,987 355,139 348,646 Gains Other 1,800 1,800 1,800 1,800 1,800 Total gains 1,800 1,800 1,800 1,800 1,800 Total ow n-source incom e 333,799 354,063 357,787 356,939 350,446 Net cost of (contribution by) services 348,719 302,197 253,262 257,062 254,910

Revenue from government 354,375 296,707* 247,785* 251,585* 249,433* Surplus (Deficit) 5,656 (5,490) (5,477) (5,477) (5,477) Total com prehensive incom e attributable to the Australian Governm ent 5,656 (5,490) (5,477) (5,477) (5,477)

Note: Reconciliation of com prehensive incom e attributable to the agency 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Total com prehensive incom e (loss) attributable to the Australian Governm ent 5,656 (5,490) (5,477) (5,477) (5,477) plus non-appropriated expenses depreciation and amortisation expenses 5,490 5,490 5,477 5,477 5,477 Total com prehensive incom e (loss) attributable to the agency 11,146 - - - - Prepared on Australian Accounting Standards basis.

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Table 3.2.2: Budgeted departmental balance sheet (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents 3,057 3,057 3,057 3,057 3,057 Trade and other receivables 152,615 163,642 178,242 189,042 200,931 Investments 18,500 18,500 18,500 18,500 18,500 Accrued revenue 8,959 8,959 8,959 8,959 8,959 Total financial assets 183,131 194,158 208,758 219,558 231,447 Non-financial assets Land and buildings 53,023 61,889 57,753 53,808 49,863 Property, plant and equipment 11,882 14,392 17,732 20,179 19,430 Intangibles 28,575 33,141 30,815 29,117 29,117 Inventories 1,218 1,218 1,218 1,218 1,218 Other 4,142 4,142 4,142 4,142 4,142 Total non-financial assets 98,840 114,782 111,660 108,464 103,770 Total assets 281,971 308,940 320,418 328,022 335,217 LIABILITIES Payables Other 74,923 75,277 75,455 75,461 75,461 Total payables 74,923 75,277 75,455 75,461 75,461 Interest bearing liabilities Leases 4,630 5,350 4,813 3,718 3,718 Total interest bearing liabilities 4,630 5,350 4,813 3,718 3,718 Provisions Employee provisions 110,162 112,059 113,306 113,306 113,306 Other 12,087 15,587 17,587 17,587 17,587 Total provisions 122,249 127,646 130,893 130,893 130,893 Total liabilities 201,802 208,273 211,161 210,072 210,072 Net assets 80,169 100,667 109,257 117,950 125,145 EQUITY* Parent entity interest Contributed equity 16,072 42,060 56,127 70,297 82,969 Reserves 68,887 68,887 68,887 68,887 68,887 Retained surplus (accumulated deficit) (4,790) (10,280) (15,757) (21,234) (26,711) Total equity 80,169 100,667 109,257 117,950 125,145 * 'Equity' is the residual interest in assets after deduction of liabilities. Prepared on Australian Accounting Standards basis.

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Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Goods and services 327,949 348,213 351,937 349,557 343,064 Appropriations 343,141 285,680 233,185 242,317 239,076 Interest 1,300 1,300 1,300 1,300 1,300 Net GST received 12,651 12,621 11,312 11,522 11,171 Other 2,750 2,750 2,750 2,750 2,750 Total ca sh received 687,791 650,564 600,484 607,446 597,361 Cash us ed Employees 478,492 445,498 421,754 425,496 420,773 Suppliers 193,381 192,914 172,905 176,125 170,763 Grants 3,500 3,500 3,500 3,500 3,500 Borrow ing costs 500 500 500 500 500 Total ca sh used 675,873 642,412 598,659 605,621 595,536 Net cash from (used by) operating activities 11,918 8,152 1,825 1,825 1,825 INVESTING ACTIVITIES Cash received Other - - - - - Total ca sh received - - - - - Cash us ed Purchase of property, plant and equipment 23,325 32,740 14,492 14,595 13,097 Total ca sh used 23,325 32,740 14,492 14,595 13,097 Net cash from (used by) investing activities (23,325) (32,740) (14,492) (14,595) (13,097) FINANCING ACTIVITIES Cash received Contributed equity 12,807 25,988 14,067 14,170 12,672 Total ca sh received 12,807 25,988 14,067 14,170 12,672 Cash us ed Finance Leases 1,400 1,400 1,400 1,400 1,400 Total ca sh used 1,400 1,400 1,400 1,400 1,400 Net cash from (used by) financing activities 11,407 24,588 12,667 12,770 11,272 Net increase (de crease) in cash held - - - - - Cash and cash equivalents at the beginning of the reporting period 3,057 3,057 3,057 3,057 3,057 Cash and cash equivalents at the end of the reporting period 3,057 3,057 3,057 3,057 3,057 Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Industry Contributed Total earnings revaluation reserves equity/ equity reserve capital $'000 $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period (4,790) 13,158 55,729 16,072 80,169 Adjustment for changes in accounting policies - - - - - Adjusted opening balance (4,790) 13,158 55,729 16,072 80,169 Surplus (deficit) for the period (5,490) - - - (5,490) Total comprehensive income (5,490) - - - (5,490) Transactions w ith ow ners Distributions to owners Returns of capital: - - - - - Contributions by owners Appropriation (equity injection) - - - 14,169 14,169 Departmental Capital Budget (DCBs) - - - 11,819 11,819 Sub-total transactions with owners - - - 25,988 25,988 Estim ated closing balance as at 30 June 2012 (10,280) 13,158 55,729 42,060 100,667 Prepared on Australian Accounting Standards basis.

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Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 CAPITAL APPROPRIATIONS Capital budget – Bill 1 (DCB) 11,536 11,819 14,067 14,170 12,672 Equity injections – Bill 2 1,271 14,169 - - - Total capital appropriations 12,807 25,988 14,067 14,170 12,672 Total new capital appropriations represented by: Purchase of non-financial assets 12,807 25,988 14,067 14,170 12,672 Other Items - - - - - Total item s 12,807 25,988 14,067 14,170 12,672 PURCHASE OF NON-FINANCIAL ASSETS Funded by capital appropriations 1,271 14,169 - - - Funded by capital appropriation – DCB1 11,536 11,819 14,067 14,170 12,672 Funded by finance leases 1,400 1,400 1,400 1,400 1,400 Funded internally from departmental resources2 10,518 6,752 425 425 425 TOTAL 24,725 34,140 15,892 15,995 14,497 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 24,725 34,140 15,892 15,995 14,497 less additions by finance lease (1,400) (1,400) (1,400) (1,400) (1,400) Total cash used to acquire assets 23,325 32,740 14,492 14,595 13,097 1 Does not include annual finance lease costs. 2 Includes the following sources of funding: – annual and prior year appropriations – internally developed assets – s. 31 relevant agency receipts – proceeds from the sale of assets

Prepared on Australian Accounting Standards basis.

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Table 3.2.6: Statement of asset movements (2011–12) Land Buildings Other Intangibles Total property, plant and equipment $'000 $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 2,200 68,012 34,189 66,473 170,874 Accumulated (7) (17,182) (22,307) (37,898) (77,394) Opening net book balance 2,193 50,830 11,882 28,575 93,480 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – appropriation equity1 - 14,169 - - 14,169 By purchase – appropriation ordinary annual services2 - 71 7,284 11,216 18,571 By finance lease - - 1,400 - 1,400 Total additions - 14,240 8,684 11,216 34,140 Other m ovem ents Assets held for sale or in a disposal group held for sale Depreciation/amortisation expense - (5,374) (6,174) (6,650) (18,198) As at 30 June 2012 Gross book value 2,200 82,252 42,873 77,689 205,014 Accumulated and impairment (7) (22,556) (28,481) (44,548) (95,592) Closing net book balance 2,193 59,696 14,392 33,141 109,422 1 "Appropriation equity" refers to equity injection appropriations provided through Appropriation Bill (No.2) 2011–12. 2 "Appropriation ordinary annual services" refers to funding provided through Appropriation Bill (No.1) 2011–12 for depreciation / amortisation expenses, DCBs or other operational expenses.

Prepared on Australian Accounting Standards basis.

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Table 3.2.7: Schedule of budgeted income and expenses administered on behalf of government (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 INCOM E ADMINISTERED ON BEHALF OF GOVERNMENT Revenue Taxation revenue Other taxes, fees and fines 377,339 387,095 383,846 383,809 385,648 Total taxation revenue 377,339 387,095 383,846 383,809 385,648 Non-taxation revenue Other sources of non-taxation revenue 5,592 3,675 3,675 3,675 3,675 Total non-taxation revenue 5,592 3,675 3,675 3,675 3,675 Total re venues adm inistered on behalf of governm ent 382,931 390,770 387,521 387,484 389,323 Gains Other gains - - - - - Total gains adm inis tered on behalf of governm ent - - - - - Total incom e adm inistered on behalf of governm ent 382,931 390,770 387,521 387,484 389,323 EXPENSES ADM INISTERED ON BEHALF OF GOVERNMENT Supplier expenses 39,624 24,824 21,781 21,922 22,097 Personal benefits 212,109 47,163 - - - Grants 769,846 710,583 679,677 675,455 677,462 Total expenses adm inistered on behalf of governm ent 1,021,579 782,570 701,458 697,377 699,559 Prepared on Australian Accounting Standards basis.

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Table 3.2.8: Schedule of budgeted assets and liabilities administered on behalf of government (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS ADM INISTERED ON BEHALF OF GOVERNM ENT Financial assets Cash and cash equivalents - - - - - Receivables 24,862 16,183 16,183 16,183 16,183 Investments accounted for using the equity method 188,239 188,239 188,239 188,239 188,239 Accrued revenue 58,505 58,505 58,505 58,505 58,505 Total financial assets 271,606 262,927 262,927 262,927 262,927 Non-financial assets Other 560 560 560 560 560 Total non-financial assets 560 560 560 560 560 Total asse ts adm inistered on behalf of governm ent 272,166 263,487 263,487 263,487 263,487 LIABILITIES ADMINISTERED ON BEHALF OF GOVERNM ENT Payables Suppliers 8,961 8,961 8,961 8,961 8,961 Personal benefits 2,302 - - - - Grants 61,669 61,669 61,669 61,669 61,669 Other 6 6 6 6 6 Total payables 72,938 70,636 70,636 70,636 70,636 Total liabilities adm inistered on behalf of governm ent 72,938 70,636 70,636 70,636 70,636 Prepared on Australian Accounting Standards basis.

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Table 3.2.9: Schedule of budgeted administered cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Taxes 377,339 387,095 383,846 383,809 385,648 Net GST received 53,540 49,110 46,296 46,027 46,171 Other 5,592 3,675 3,675 3,675 3,675 Total cash received 436,471 439,880 433,817 433,511 435,494 Cash used Grant payments 822,506 766,733 724,536 720,035 722,174 Personal benefits 214,087 49,465 - - - Suppliers 42,240 26,463 23,218 23,369 23,556 Total cash used 1,078,833 842,661 747,754 743,404 745,730 Net cash from (used by) operating activities (642,362) (402,781) (313,937) (309,893) (310,236) Net increase (decrease) in cash held (642,362) (402,781) (313,937) (309,893) (310,236) Cash and cash equivalents at beginning of reporting period - - - - - Cash from Official Public Account for: – Appropriations 1,077,097 833,982 747,754 743,404 745,730 – Special accounts 40,719 45,802 37,127 37,177 37,177 1,117,816 879,784 784,881 780,581 782,907 Cash to Official Public Account for: – Administered revenue 436,471 439,880 433,817 433,511 435,494 – Special accounts 38,983 37,123 37,127 37,177 37,177 475,454 477,003 470,944 470,688 472,671 Cash and cash equivalents at end of reporting period - - - - - Prepared on Australian Accounting Standards basis.

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3.2.4 Notes to the financial statements The departmental financial statements include financial information for all operations controlled by the department, including AQIS and the National Residue Survey. All transactions between these operations have been eliminated in the financial statements.

The statements are prepared in accordance with accounting policies published in the department’s annual report.

82 83 Portfolio overview

COTTON RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources 89 1.1 Strategic direction 89 1.2 Agency resource statement 92 1.3 Budget measures 92 Section 2: Outcomes and program performance93 2.1 Outcomes and program performance information 93 Section 3: Explanatory tables and budgeted financial statements 96 3.1 Explanatory tables 96 3.2 Budgeted financial statements 97

84 COTTON RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION

2011–2012 marks the fourth year of operation under the five-year Strategic Research and Development (R&D) Plan 2008–2013. In collaboration with growers, researchers and the commercial sector, the Cotton Research and Development Corporation (CRDC) strives to achieve sustainable competitive advantage for Australian cotton.

CRDC, in early 2011, conducted a mid-term review of its Strategic R&D Plan with the assistance of its Australian Government and cotton industry stakeholders. An independent scan of publicly available reports and media that relate to the cotton industry and its R&D operating environment was conducted. The results highlighted that the CRDC Strategic R&D Plan assumptions and goals, with some changes in importance, remain highly relevant. In fact, the importance of the quest for competitive advantage continues to increase within the context of the strategic challenges and opportunities arising for the Australian cotton industry and agriculture in general. CRDC plans to invest $13.88 million in 2011–12 to further industry performance improvements typified by ongoing gains in productivity, market competitiveness, resilience, improved energy and water use efficiency. Complementary improvements to environmental performance will be accompanied by a strong focus on development and adoption of best practices and technologies across all sectors of the cotton industry. Achievement of these goals will be supported by CRDC’s commitment to collaborate broadly for greater R&D impact and gains in efficiency.

Resurgence in cotton production

In planning for the 2011–12 year, CRDC has considered how it can best respond to the needs of a much-changed grower audience. The number of enterprises growing cotton, together with the area planted to cotton both doubled during the 2010–11 season – these surges were on the back of strong cotton prices and a return to water availability over much of the industry’s production footprint. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts Australian cotton production to be 839,000 tonnes (some 3.7 million bales) in 2010–11 (ABARES Australian Commodities, March quarter 2011). This would make the 2010–11 harvest a record crop for the Australian industry.

There remains optimism for further increases in production in 2011–12 with the net effect of a strong financial position for rebuilding research intensity, capability and meeting the R&D needs of a mixed audience of new, returning and experienced growers.

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Improving the performance of cotton

Cotton operates in an environment where there is an ever-increasing demand for land, water, food, energy and labour. Consistent productivity gains have allowed the industry to make better use of scarce resources. Productivity in terms of yield per hectare has risen over the past decade at 4 per cent per year. Maintaining this high rate of productivity growth remains a key challenge. A greater proportion of future production is expected to come from dry land (non-irrigated) production. CRDC’s investments in 2011–12 will seek to sustain productivity growth for irrigated and dryland farming systems as well as improve routes to market for differentiated and premium Australian cotton products.

CRDC will invest in a third Cotton Industry Environmental Audit in 2011–12. This audit will assess industry progress since the most recent audit of 2003. It is intended to evaluate current performance and make recommendations for ongoing improvements. Environmental audits have provided a valuable benchmarking and planning framework for improvement in industry performance since 1990 when the inaugural audit was conducted.

Resilience and climate change preparedness

Throughout drought and then the recent flood disaster, the importance of the capacity of people managing adaptive farming systems has been central to the resilience of growers and the industry at large. CRDC’s investments in 2011–12 will continue to develop human capability. Among them, best practices and technologies can be better applied to assist growers improve risk management and flexibility of farming systems to prepare for and recover from climate change and natural disasters.

Energy use and carbon

R&D investments in 2011–12 focus on improving on-farm energy use and nitrogen use efficiency coupled with reduced greenhouse gas emissions. Additional research will commence to better equip growers to understand and manage soil carbon in farming and natural systems on-farm.

Sustainable irrigation

CRDC took on the role of Managing Agent for the National Program for Sustainable Irrigation (NPSI) in 2009. Whilst this collaboration formally ceases at 30 June 2011, the CRDC will be managing the finalisation of remaining R&D projects and promoting the awareness and adoption of the results of NPSI research.

Separately CRDC will continue to address improved cotton water use efficiency through investment in improved yields and the adoption of more efficient irrigation technology and management practices.

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Cotton research, development and extension sector plan

The Primary Industries Standing Committee (PISC) Cotton Sector Research, Development and Extension (RD&E) Plan is presently being finalised for implementation in 2011–12. Development of the RD&E plan was significantly assisted by the cotton industry vision process that received industry-wide support. CRDC will continue to provide impetus for industry to inform its RD&E needs, strategies and priorities.

Increasing uptake of R&D outcomes

The 2011–12 year will see continued implementation of a new model for supporting adoption of industry R&D and the redevelopment of myBMP – the web-based version of the industry’s Best Management Practices program. Being flexible and user focused, this is positioning cotton growers as being equipped to self-assess their performance and practices against industry agreed standards.

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1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all origins. The table summarises how resources will be applied by outcome; and by administered and departmental classification.

Table 1.1: CAC Act Body Cotton Research and Development Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Propose d Total Actual of prior at Budget estim ate available year am ounts appropriation available in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Opening balance/Reserves at bank 15,683 - 15,683 11,282 REVENUE FROM GOVERNMENT Special appropriations 1 Primary Industries and Energy Research and Development Act 1989 s. 30(3) – Cotton R&D - 15,059 15,059 11,996 Total special appropriations - 15,059 15,059 11,996 Total funds from governm ent - 15,059 15,059 11,996 FUNDS FROM INDUSTRY SOURCES Levies2 - 7,267 7,267 5,876 less amounts paid to the CRF - (7,267) (7,267) (5,876) Total - - - - FUNDS FROM OTHER SOURCES Interest - 770 770 449 Royalties - 3,091 3,091 4,088 Other - 863 863 1,415 Total - 4,724 4,724 5,952 Total net resourcing for agency 15,683 19,783 35,466 29,230 1 CRDC is not directly appropriated as it is a CAC Act body. Appropriations are made to the Department of Agriculture, Fisheries and Forestry (DAFF), which are then paid to CRDC and are considered 'departmental' for all purposes. 2 The levy is imposed and collected under the following legislation: Primary Industries and Energy Research and Development Act 1989, Primary Industries (Excise) Levies Act 1999, Primary Industries Levies and Charges Collection Act 1991 and associated legislation.

1.3 BUDGET MEASURES

CRDC is not affected by any 2011–12 budget measures.

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Section 2: Outcomes and program performance

2.1 OUTCOMES AND PROGRAM PERFORMANCE INFORMATION

The Australian Government requires agencies to measure their intended and actual performance in terms of outcomes. Government outcomes are the intended results, impacts or consequences of actions by the government on the Australian community. Agencies are required to identify the programs that contribute to government outcomes over the budget and forward years.

CRDC has the following outcome:

Outcome 1: Adoption of innovation that leads to increased productivity, competitiveness and environmental sustainability through investment in research and development that benefits the Australian cotton industry and the wider community. Outcome 1 Strategy  The CRDC goals, performance indicators and targets for measuring the achievement of the outcome are outlined. The targets extend to the end of the CRDC’s strategic plan that finishes in 2013.

 Under the strategic plan, three goals set the direction for initiatives to be undertaken that deliver the outcome. They are:

- add value to the Australian Cotton Industry with premium products in improved routes to market

- cotton in a highly productive farming system with improved environmental performance

- development of a culture of innovation and learning.

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Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1 by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: Adoption of innovation that leads to increased 2010–11 2011–12 productivity, com petitiveness and e nvironm ental Estimated Estimated sustainability through investm ent in research and actual expenses developm ent that benefits the Australian cotton industry expenses and the w ider com m unity. $'000 $'000 Program 1.1: Cotton Research and Developm e nt Corporation Revenue from government Special appropriations 4,005 5,393 Revenues from industry sources 4,075 5,189 Revenues from other independent sources 2,862 3,299 Total for Program 1.1 10,942 13,881 Outcom e 1 Totals by resource type Revenue from government Special appropriations 4,005 5,393 Revenues from industry sources 4,075 5,189 Revenues from other independent sources 2,862 3,299 Total expenses for Outcom e 1 10,942 13,881

2010–11 2011–12 Average Staffing Level (num ber) 8 8

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Contributions to Outcome 1

Program 1.1: Cotton Research and Development Corporation

Program objective Enhanced performance of the Australian cotton industry and community through investments in research and development, and its application.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual departmental expenses: Cotton Research and Development Corporation 10,942 13,881 13,716 11,993 9,400 Total program expens es 10,942 13,881 13,716 11,993 9,400

Program 1.1 Deliverables • Add value to the Australian cotton industry with premium products in improved routes to market. • Encourage the use of cotton in a highly productive farming system with improved environmental performance achieved. • Promote a culture of innovation and learning.

Program 1.1 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 21 year 31 Coverage of Best Management 40% 60% 80% - - Practice systems across Australian cotton industry. Industry productivity 3% 3% 3% - - grow th per hectare per annum. PISC cotton sector RD&E Plan - Yes. Yes. - - implemented. 1 KPIs are yet to be developed for 2013–14; 2013 will be the first year of a new five-year R&D Plan covering 2013–2018.

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Section 3: Explanatory tables and budgeted financial statements

Section 3 presents budgeted financial statements that provide a comprehensive snapshot of agency finances for the budget year 2011–2012. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, special accounts and government indigenous expenditure.

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years The CRDC does not have any administered funds.

3.1.2 Special accounts The CRDC does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because CRDC has no indigenous specific expenses.

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3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Analysis of budgeted financial statements Significant rainfall in most cotton growing regions together with improved availability of irrigation water and high cotton prices led to increased crop planting in 2010. With this background, industry and ABARES forecasts are for higher than historical average levels of cotton production over the next three years.

CRDC has prudently taken a conservative approach to its budget assumptions and adopted an estimate of the 2010–11 crop size at 3.5 million bales (budget 1.75 million bales) and forecast future crop sizes of 3.0 million bales in 2011–12 and 2.5 million bales in 2012–13.

CRDC has budgeted for revenue of $19.44 million in 2011–12 and expenditure of $13.88 million, providing for a surplus budget of $5.56 million. Research capacity has been significantly reduced during the previous period of extended drought and it will take time to increase research and development capacity. Concurrently CRDC intends to rebuild reserves from surpluses in both the 2010–11 and 2011–12 years to support research in future years. The balance of expenditure and reserves will be closely monitored to ensure that it remains appropriate.

The Australian Government general matching of industry contributions is expected to be limited to 0.5 per cent of the cotton industry’s three-year average gross value of production (GVP).

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Table 3.2.1 Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 1,320 1,383 1,438 1,496 1,556 Supplier expenses 477 480 413 427 441 Grants 9,086 11,958 11,805 10,010 7,343 Depreciation and amortisation 59 60 60 60 60 Total expe nses 10,942 13,881 13,716 11,993 9,400 LESS: OWN-SOURCE INCOM E Ow n-source revenue Industry Contributions 6,130 7,267 6,142 5,018 3,892 Interest 529 770 770 770 770 Rental income 15 15 15 15 15 Royalties 2,331 3,091 1,746 936 460 Other 1,429 743 100 100 100 Total ow n-source incom e 10,434 11,886 8,773 6,839 5,237 Net cost of (contribution by) services 508 1,995 4,943 5,154 4,163 Revenue from government 6,024 7,552 6,476 5,154 4,163 Surplus (Deficit) 5,516 5,557 1,533 - - Surplus (Deficit) attributable to the Australian Governm ent 5,516 5,557 1,533 - - Prepared on Australian Accounting Standards basis.

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95 CRDC Budget Statements

Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Industry contributions 5,876 7,267 6,142 5,018 3,892 Revenue from government 6,120 7,792 6,476 5,154 4,163 Interest 449 770 770 770 770 Net GST received 691 940 1,036 939 720 Other 5,503 3,954 2,048 1,156 633 Total ca sh received 18,639 20,723 16,472 13,037 10,178 Cash us ed Employees 1,320 1,383 1,438 1,496 1,556 Suppliers 559 479 404 417 430 Grants 12,294 13,647 13,037 11,064 8,132 Total ca sh used 14,173 15,509 14,879 12,977 10,118 Net cash from (used by) operating activities 4,466 5,214 1,593 60 60 INVESTING ACTIVITIES Cash us ed Purchase of property, plant and equipment 65 65 40 40 40 Total ca sh used 65 65 40 40 40 Net cash from (used by) investing activities (65) (65) (40) (40) (40) Net increase (de crease) in cash held 4,401 5,149 1,553 20 20 Cash and cash equivalents at the beginning of the reporting period 11,282 15,683 20,832 22,385 22,405 Cash and cash equivalents at the end of the reporting period 15,683 20,832 22,385 22,405 22,425 Prepared on Australian Accounting Standards basis.

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Total earnings revaluation equity reserve $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 15,839 207 16,046 Surplus (deficit) for the period 5,557 - 5,557 Total comprehensive income 5,557 - 5,557 Estim ated closing balance as at 30 June 2012 21,396 207 21,603 Prepared on Australian Accounting Standards basis.

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Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources1 65 65 40 40 40 TOTAL 65 65 40 40 40 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 65 65 40 40 40 Total cash used to acquire assets 65 65 40 40 40 1 Includes the following sources of funding: – annual and prior year appropriations – donations and contributions – gifts – internally developed assets – proceeds from the sale of assets

Prepared on Australian Accounting Standards basis.

Table 3.2.6: Statement of asset movements (2011–12) Land Buildings Other property, Intangibles Total plant and equipment $'000 $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 170 405 157 138 870 Accumulated depreciation/amortisation and impairment - (19) (104) (109) (232) Opening net book balance 170 386 53 29 638 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – other - 25 20 20 65 Total additions - 25 20 20 65 Other m ovem ents Depreciation/amortisation - (9) (28) (23) (60) As at 30 June 2012 Gross book value 170 430 177 158 935 Accumulated depreciation/amortisation and impairment - (28) (132) (132) (292) Closing net book balance 170 402 45 26 643 Prepared on Australian Accounting Standards basis.

FISHERIES RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources 105 1.1 Strategic direction statement 105 1.2 Agency resource statement 108 1.3 Budget measures 108 Section 2: Outcomes and planned performance 109 2.1 Outcomes and performance information 109 Section 3: Explanatory tables and budgeted financial statements 116 3.1 Explanatory tables 116 3.2 Budgeted financial statements 117

99 FISHERIES RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

1.1.1 The business environment The Fisheries Research and Development Corporation (FRDC) plays a pivotal role in planning, funding and managing Research, Development and Extension (RD&E) activities for its stakeholders; the Australian Government and the fishing industry.

FRDC aims to maximise the benefits from its investment by ensuring that the activity is well targeted, meets governments and industry RD&E priorities, and builds on previous achievements where applicable.

FRDC is unique among the rural research and development corporations in taking a leadership role in balancing investment priorities between natural resource management and industry productivity and development. The majority of FRDC’s RD&E investment addresses public good priorities so as to ensure sustainable fisheries management and sustainable habitats.

In addition FRDC is strategically placed to work with the Australian Government, industry and research providers around Australia. This positioning also allows FRDC to communicate and network with partners to leverage, and broker knowledge to get the best results from RD&E for government, industry and the community.

FRDC plays a leadership role in fisheries RD&E through:

 project planning, management and extension across government agencies and industry nationally

 facilitation and partnership activities with research partners

 collaboration across other Research and Development Corporations (RDCs), independent agencies/states and international organisations

 leverage of investment funds across Australia.

With its partners FRDC extends the results of RD&E and pursues adoption and, when appropriate commercialisation, by the end-users. It also raises awareness of vital issues related to the fishing and aquaculture industry such as industry development, social

100 FRDC Budget Statements and economic impacts on fishing communities, and the health benefits of eating seafood.

1.1.2 External drivers for research and development investment FRDC is responsible for investing in and delivering information to stakeholders. It provides RD&E services in response to demand from industry and governments (stakeholders). Knowledge generated by FRDC’s investment in RD&E assists stakeholders to meet a range of economic, social and environmental objectives for the fishing industry. The competing demands of stakeholders for the limited resources available to FRDC are balanced through strategic planning and associated stakeholder consultative processes to develop balanced investment RD&E programs. FRDC investments are informed primarily by advice from its three representative organistions. In addition it consults widely with other stakeholders. The business environment in which FRDC operates is characterised by:  an emphasis on natural resource management

 specific priorities of the diverse sectors of the fishing and aquaculture industry (commercial, recreational and indigenous)

 geographic diversity, because Australia’s waters extend from the tropics to the Antarctic, and include both marine and freshwater

 a broad range of products, including 800+ commercial species, 1000+ recreational species, and 100+ farmed species; and consideration of a further 100+ protected species. Priority areas and Outputs for 2011–12 Reducing by-catch and incidental catch of threatened, endangered or protected species — By-catch and by-catch reduction will continue to be an area in which a range of activities is undertaken. Activities are underway to reduce the interactions between fishers and sea snakes, seals and other threatened, endangered and protected species. Climate change — FRDC has commenced a coordinated funding program to enhance the fishing industry’s capacity to adapt, mitigate against, and take advantage of, further climate change. The program partners are the Department of Climate Change and Energy Efficiency (DCCEE), the Department of Agriculture, Fisheries and Forestry (DAFF) and participating state government agencies. Over the course of the next three years the research funded in 2009–10 will start to become available. FRDC will continue to participate with the other rural RDCs in the collaborative research initiative “Climate Change Research Strategy for Primary Industries (CCRSPI)”, to examine and adapt to the impacts of climate change on primary industries.

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Improving the profitability of the seafood sector — Investment will aim to optimise the use of wild resources, and build on increasing capacity in the aquaculture sector. Research in Western Australia will target under-utilised fish stocks and improved retail chains. Social and personal values of recreational and customary fishers are also a focus here. People development — professional development awards and leadership programs will build leadership, professionalism, and cross-sectoral understanding, and enhance opportunities for young people, Aboriginal and Torres Strait Islanders, and women to participate and reach their potential. FRDC is partnering with Seafood Services Australia to address trade and market access issues in a number of international markets, including China and the European Union. Resource access and allocation — Resource access and allocation, and the delivery of performance indicators for spatial management will be completed. Work will continue on developing data collection techniques for recreational fishers and how this can be incorporated into management models for the future. Improving people capacity — Opportunities to develop and share knowledge and skills will be provided through a visiting experts program, travel awards and conferences. Further, FRDC is leading a change in culture around workforce training and will invest in workforce attraction and retention strategies, including industry and research connections with the education sector. Improving customary values for indigenous fishers — Indigenous input into management, planning and project assessment is limited due to the complexities and costs of engaging effectively with indigenous Australians on fishing and seafood related issues. FRDC has funded a number of projects to identify approaches that will result in improved consultative processes between representatives of other fisheries and indigenous community. Increasing the emphasis on extension and adoption — FRDC will assist in the development of a national Fisheries Extension and Adoption plan to facilitate the transfer of knowledge to its stakeholders. This may include the development of an extension network and a range of information resources for industry. It will also look to fund research to better target extension activities. Joint Rural RDC and Government Initiatives: Fishing and Aquaculture RD&E Strategy — FRDC has helped develop the Fishing and Aquaculture RD&E Strategy, and will continue to take a lead role in its implementation in partnership with the Australian Fisheries Management Forum and FRDC’s Representative Bodies. Rural R&D Council — FRDC will work with the Council of Rural Research and Development Corporations (CRRDC) to ensure that the proposed national plan being developed by the Rural R&D Council delivers desirable outcomes to government, industry and other stakeholders. Integral to this development will be the implementing of the CRRDC strategic plan, and the RD&E Framework for all rural sectors; and in particular the fishing and aquaculture sector.

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Shared services — In partnership with the Canberra based research and development corporations (RDCs), FRDC is working to share services to reduce administrative costs and ensure efficient delivery of RD&E investment. Some of these shared services will have efficiency benefits for non-Canberra based RDCs. Productivity Commission (PC) — FRDC will work with the Australian Government to implement any recommendations from the PC Report.

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1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: CAC Act Body Fisheries Research and Development Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Est im ate Pr op o s e d T o tal A ct u al o f pr ior at Bu d g e t e st im ate availab le ye ar am o u n ts ap p r op r iat io n availab le in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Op e n in g b alan ce /Re s e rve s at b an k 7,331 - 7,331 7,935 REV ENUE FROM G OV ERNM ENT Sp e cial ap p ro p r iatio n s 1 Primary industri es and Energy Research and Development Act 1989, s. 30A(3) – Fisheries R&D Corporation - 16,297 16,297 16,529 T ot al sp e cial ap p ro p r iat io n s - 16,297 16,297 16,529 T o t al f u n d s f ro m g o ve rn m en t - 16,297 16,297 16,529 FUNDS FROM INDUST RY SOURCES Levies 2 - 150 150 162 less amounts paid to the CRF - (150) (150) (162) Industry contributions - 8,544 8,544 8,372 T ot al - 8,544 8,544 8,372 FUNDS FROM OT HER SOURC ES Interest - 275 275 325 Sale of goods and services - 105 105 110 Other - 800 800 168 T ot al - 1,180 1,180 603 T o t al n e t r e s o ur cin g fo r ag e n cy 7,331 26,021 33,352 33,439 1 FRDC is not directly appropriated as it is a CAC Act body. Appropriations are made to DAFF which are then paid to FRDC and are considered 'departmental' for all purposes. 2 The levies collected under The Primary Industry Levies and Charges Collection Act 1991 are remitted to DAFF and transferred to the CRF. An equivalent amount of the FRDC management levy is paid by DAFF to FRDC under a special appropriation under the Primary Industries and Energy Research and Development Act 1989 (PIERD Act 1989).

All figures are GST exclusive CRF – Consolidated Revenue Fund

1.3 BUDGET MEASURES

FRDC is not affected by any 2011–12 budget measures.

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Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

Government outcomes are the intended results, impacts or consequences of actions by the government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs which contribute to government outcomes over the budget and forward years.

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of FRDC in achieving government outcomes.

Outcome 1: Increased knowledge that fosters sustainable economic, environmental and social benefits for the Australian fishing industry; including indigenous, recreational, commercial and aquaculture sectors, and the community; through investing in research, development and adoption.

Outcome 1 Strategy FRDC’s mission is to maximise economic, environmental and social benefits for its stakeholders through effective investment and partnership in research and development.

FRDC has defined five RD&E program components to address the diverse nature of FRDC’s business environment and the range of demands of its stakeholders. 1. Environments 2. Industries 3. Communities 4. People 5. Extension and Adoption

In 2011–12 the key drivers and issues for the fishing industry are likely to be:  Public perception of the industry  Cost of production – fuel prices, labour shortages, and strong Australian currency.  Climate change (changes in recruitment patterns, increased sea temperature, volatile weather patterns)  Resource access (new aquaculture developments, Marine Protected Areas (MPAs))  Pressure on fish stocks  Skilled labour shortages  Aquatic animal health and biosecurity  Value adding and market promotion

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 Increased competition in world markets (tariffs and trade barriers)  Price competition in the domestic market.

The fishing industry is Australia’s sixth most valuable food-based primary industry with a landed value of more than $2.1 billion a year. In addition more than 3.4 million Australians recreationally fish each year spending an additional $2.5 billion. For indigenous communities the fishing industry not only provides a significant role in culture and subsistence but also an avenue for economic and community development.

Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1 by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: Increased know ledge that fosters 2010–11 2011–12 sustainable econom ic, environm ental and social benefits Estimated Estimated for the Australian fishing industry; including indigenous, actual expenses recreational, com m ercial and aquaculture sectors, and expenses the com m unity; through investing in res earch, $'000 $'000 Program 1.1: Fisheries Research and Developm ent Corporation Revenue from government 16,527 16,295 Revenues from industry sources 7,970 7,544 Revenues from other independent sources 1,507 2,484 Total for Program 1.1 26,004 26,323 Outcom e 1 Totals by resource type Revenue from government 16,527 16,295 Revenues from industry sources 7,970 7,544 Revenues from other independent sources 1,507 2,484 Total expenses for Outcom e 1 26,004 26,323

2010–11 2011–12 Average Staffing Level (num ber) 12 11

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Contributions to Outcome 1

Program 1. 1: Fisheries Research and Development Corporation

Program objective FRDC invests in research and development that delivers increased knowledge that fosters sustainable economic, environmental and social benefits for the Australian fishing industry; including indigenous, recreational, commercial and aquaculture sectors, and the community; through investing in research, development and adoption.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual departmental expenses: Fisheries Research and Development Corporation 26,004 26,323 26,151 26,274 26,947 Total program expens es 26,004 26,323 26,151 26,274 26,947

Program components 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 1.1.1 – Component 1 Annual Departmental Expenses: Environment 8,702 8,980 8,850 8,830 9,024 1.1.2 – Component 2 Annual Departmental Expenses: Industry Development 9,354 9,653 9,514 9,492 9,700 1.1.3 – Component 3 Annual Departmental Expenses: Communities 326 337 332 331 338 1.1.4 – Component 4 Annual Departmental Expenses: People Development 2,067 2,133 2,102 2,097 2,143 1.1.5 – Component 5 Annual Departmental Expenses: Extension and Adoption 1,305 1,347 1,328 1,325 1,354 Management and Accountability 4,250 3,873 4,025 4,199 4,388 Total program expenses 26,004 26,323 26,151 26,274 26,947 Program 1.1 Deliverables Environment Provide investment in research and development that addresses: • biosecurity and aquatic animal health • ecologically sustainable development • habitat and ecosystem protection • climate change.

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Industry Development Provide investment in research and development that addresses: • resource access and allocation • growth and profitability • governance and regulatory systems • maximising value from aquatic resources • consumers and markets. Communities Provide investment in research and development that addresses: • consumers and lifestyles issues • community resilience and development. People Development Invest in a bursary program to support personal and professional development activities, including support for indigenous development. Sponsor the development of fishing industry people, students and researchers through the National Seafood Industry Leadership Program, the Australian Rural Leadership Program, and other programs. Extension and Adoption Provide investment in extension and adoption activities that aim to transfer knowledge generated from research and development activities. Management and Accountability Meet statutory and Australian Government requirements. Undertake benefit cost analyses to quantify the effectiveness of FRDC’s investments. Provide access to information through website, publications and reports. Support workshops, forums and conferences to encourage debate, discussion and adoption of research funded by FRDC. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Projects focus on the FRDC - 95% 95% 95% 95% Board's assessment of priority research and development issues. Projects are assessed as meeting - 95% 95% 95% 95% high standards/peer review requirements for improvements in performance and likely adoption. Environm ents Development and dissemination of - Develop- - - - protocols, techniques and ment of technologies to mitigate and diagnostic minimise the impact of disease tests. Demonstrated improved - 2 2 2 2 sustainability performance from the use of RD&E outputs. Report on improving management of by- catch and in particular threatened, endangered and protected species (TEP).

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2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables (continued) budget year 1 year 2 year 3 Improvement in understanding of - 2 2 2 2 the impacts of climate change that leads to adaptation by fisheries management and industry. Report to outline adaption measures used by industry. Development of mechanisms and - 1 1 1 1 technologies to collect economic, environmental and social data to inform management processes. Fisheries to incorporate economic data into fisheries management. Improvement in know ledge - Assess- 1 1 1 of the relationship betw een ment environmental processes and methods know n biological processes. for data poor fisheries extended to relevant stake- Industry Development of processes and - Two - - - technologies to improve the fisheries efficiency of governance and adopt regulatory systems for fishing and co-manage- aquaculture. ment arrangements. Development of methods to - One remote - - - incorporate economic know ledge electronic into fisheries management. tool developed and trialled. Development of processes for - 2 2 2 2 efficient, transparent alocation of shares and associated proprty rights for all aquatic resource users. New projects to look at allocation and access issues. Development of know ledge, - One new - - - processes and technologies to product improve productivity and developed. profitability of the commercial Development of know ledge and - New - - - technologies in the areas of breeding domestication and breeding program genetics to support grow th of the imple- aquaculture sector. mented.

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2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables (continued) budget year 1 year 2 year 3 Development of know ledge and - Market - - - technologies to support the research industry's development of new undertaken products. on one market. Development of know ledge and - One supply - - - technologies to improve seafood chain value chains and support trade mapped and market access. and recommend ations Com m unities Development of know ledge to - One report 1 1 1 better inform the community's published. perceptions of the industry and to increase support for the industry. People developm ent Provision of know ledge and - 17 17 17 17 opportunities to develop leadership participants skills and diversity across all complete sectors of the industry and across leadership aligned stakeholder groups, courses. including researchers and Development of know ledge and - 1 health - - - tools to meet future w orkforce and and safety skill needs. project funded through Collaborati ve Partnership for Farming and Fishing Health and Safety. Mechanisms and tools to attract - 15 15 15 15 and nurture RD&E capability in participants priority areas. complete bursary program.

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2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables (continued) budget year 1 year 2 year 3 Managem ent and Accountability Maintain ISO9001:2008 accreditation. - 1 1 1 1 Submit planning and reporting - 100% 100% 100% 100% documents in accordance w ith legislative and Australian Government requirements and Implement best practice - 100% 100% 100% 100% governance arrangements to promote transparency, good business performance, and Demonstrate the benefits of RD&E - 100% 100% 100% 100% investments by positive benefit cost analysis results.

Program 1.1 Key Performance Indicators Key Performance Indicators will be measured by: • reports on improvements in performance and adoption • reports on the number of people participating in people development activities and media/industry reporting on FRDC’s investments • reports on performance against requirements and better practice.

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Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years FRDC does not have any administered funds.

3.1.2 Special accounts FRDC does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure Table 3.1.3: Australian Government Indigenous Expenditure Appropriations Other Total Program Bill Bill No. 1 No. 2 $'000 $'000 $'000 $'000 Fisheries Research and Developm ent Corporation Outcom e 1 Increased know ledge that fosters sustainable economic, environmental and social benefits for the Australian fishing industry; including indigenous, recreational, commercial and aquaculture sectors, and the community; through investing in research, development and adoption. Departmental 2011–12 - - 346 346 1.1 Departmental 2010–11 - - 698 698 1.1 Total outcom e 2011–12 - - 346 346 Total outcome 2010–11 - - 698 698

Total AGIE 2011–12 - - 346 346 Total AGIE 2010–11 - - 698 698

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3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Analysis of budgeted financial statements FRDC’s RD&E expenditure is totally dependent on its projected income stream. The long term income forecast for FRDC remains static. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) indicate the gross value of production (GVP) for the Australian fishing industry, on which government income FRDC is based, will remain static, with little growth expected. Nevertheless, aquaculture is anticipated to grow in the coming years; however some uncertainty remains around the size of this growth. In addition, income contributions from the commercial sector are expected to maintain current levels.

The once off income received late in 2009–2010 from the Department of Climate Change and Energy Efficiency for management of Marine and Aquatic Resource adaptation research and development projects will commence being expended in 2010–2011 and will cease in 2012–2013.

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3.2.2 Budgeted financial statements tables Table 3.2.1 Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 1,753 1,948 2,045 2,147 2,255 Supplier expenses 1,764 1,230 1,363 1,472 1,568 Grants 21,754 22,450 22,126 22,075 22,559 Depreciation and amortisation 685 660 600 560 540 Other 48 35 17 20 25 Total expenses 26,004 26,323 26,151 26,274 26,947 LESS: OWN-SOURCE INCOME Ow n-source revenue Sale of goods and rendering of 110 105 105 105 105 Interest 325 275 275 275 275 Industry contributions 7,971 7,545 7,865 7,856 8,077 Other 1,072 2,105 1,690 1,750 1,800 Total ow n-source revenue 9,478 10,030 9,935 9,986 10,257 Total ow n-source incom e 9,478 10,030 9,935 9,986 10,257 Net cost of (contribution by) services 16,526 16,293 16,216 16,288 16,690 Revenue from government 16,529 16,297 16,227 16,295 16,700 Surplus (Deficit) 3 4 11 7 10 Surplus (Deficit) attributable to the Australian Governm ent 3 4 11 7 10 Prepared on Australian Accounting Standards basis.

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Provisions Employee provisions 448 461 475 489 504 Total provisions 448 461 475 489 504 Total liabilities 2,253 2,021 1,656 1,406 1,241 Net assets 9,786 9,790 9,801 9,808 9,818 EQUITY* Reserves 195 195 195 195 195 Retained surplus 9,591 9,595 9606 9,613 9,623 Total equity 9,786 9,790 9,801 9,808 9,818 * 'Equity' is the residual interest in assets after deduction of liabilities. Prepared on Australian Accounting Standards basis.

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Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Goods and services 110 105 105 105 105 Receipts from Australian Government 16,529 16,297 16,227 16,295 16,700 Interest 325 275 275 275 275 Other 8,540 9,344 9,744 9,257 9,759 Total ca sh received 25,504 26,021 26,351 25,932 26,839 Cash us ed Employees 1,773 1,935 2,031 2,133 2,240 Suppliers 1,739 1,238 1,358 1,464 1,517 Projects Expenditure 22,106 22,430 22,201 22,023 22,581 Other 140 292 326 344 264 Total ca sh used 25,758 25,895 25,916 25,964 26,602 Net cash from (used by) operating activities (254) 126 435 (32) 237 INVESTING ACTIVITIES Cash us ed Purchase of property, plant 100 100 80 50 50 and equipment Purchase of Intangibles 250 300 300 300 250 Total ca sh used 350 400 380 350 300 Net cash from (used by) investing activities (350) (400) (380) (350) (300) Net increase (de crease) in cash held (604) (274) 55 (382) (63) Cash and cash equivalents at the beginning of the reporting period 7,935 7,331 7,057 7,112 6,730 Cash and cash equivalents at the end of the reporting period 7,331 7,057 7,112 6,730 6,667 Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011-12) Retained Asset Other Contributed Total earnings revaluation reserves equity/ equity reserve capital $'000 $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 9,591 195 - - 9,786 Adjusted opening balance 9,591 195 - - 9,786 Com prehensive incom e Surplus (deficit) for the period 4 - - - 4 Total comprehensive income 4 - - - 4 Estim ated closing balance as at 30 June 2012 9,595 195 - - 9,790 Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources1 350 400 380 350 300 TOTAL 350 400 380 350 300 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 350 400 380 350 300 Total cash used to acquire assets 350 400 380 350 300 1 Includes the following source of funding: – annual and prior year appropriations

Prepared on Australian Accounting Standards basis.

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Table 3.2.6: Statement of asset movements (2011–12) Other property, Intangibles Total plant and equipment $'000 $'000 $'000 As at 1 July 2011 Gross book value 441 4,508 4,949 Accumulated depreciation/amortisation (273) (2,313) (2,586) Opening net book balance 168 2,195 2,363 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem e nt assets By purchase – or internally developed 100 300 400 Total additions 100 300 400 Other m ovem ents Depreciation/amortisation expense (150) (510) (660) As at 30 June 2012 Gross book value 541 4,808 5,349 Accumulated depreciation/amortisation (423) (2,823) (3,246) Closing net book balance 118 1,985 2,103 Prepared on Australian Accounting Standards basis.

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Section 1: Agency overview and resources 125 1.1 Strategic direction statement 125 1.2 Agency resource statement 128 1.3 Budget measures 128 Section 2: Outcomes and planned performance 129 2.1 Outcomes and performance information 129 Section 3: Explanatory tables and budgeted financial statements 136 3.1 Explanatory tables 136 3.2 Budgeted financial statements 137

119 GRAINS RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

The Grains Research and Development Corporation (GRDC) was established in 1990, under the Primary Industries and Energy Research and Development Act 1989 (PIERD Act 1989). With a vision of ‘driving innovation for a profitable and environmentally sustainable Australian grains industry’, the GRDC’s mission is:

To invest in innovation for the greatest benefit to its stakeholders. This will be achieved by being a global leader in linking science, technology and commercialisation with industry and community needs.

As part of the Agriculture, Fisheries and Forestry Portfolio, the GRDC delivers one outcome: New information and products that enhance the productivity, competitiveness and environmental sustainability of Australian grain growers and benefit the industry and wider community, through planning, managing and implementing investments in grains research and development.

The GRDC invests in research, development and extension (RD&E) activities across a portfolio spanning temperate and tropical cereals, coarse grains, pulses and oilseeds. This includes coordinating the activities; monitoring, evaluating and reporting on their impact; and facilitating the dissemination, adoption and commercialisation of their results. The GRDC also contributes to the development of strategic national approaches to grains industry RD&E, to reduce fragmentation and duplication, and to help address industry-wide issues. To meet the challenges of its business environment and optimally address the RD&E priorities of its key customers (grain growers and the Australian Government), the GRDC:

 pursues a wide range of opportunities for communication and consultation  fosters productive relationships, including collaborations and commercial partnerships, with other organisations in Australia and overseas  continually assesses the performance of its programs and projects, and regularly evaluates the longer term economic, social and environmental impacts of its investments. To identify and respond to current priorities for research and development (R&D) investment, the GRDC consults and interacts with a wide range of stakeholders, such as industry bodies; plant breeders, growers, advisors, exporters and other participants in the grains value chain; researchers; and government agencies. Strategic priorities identified for 2011–12 include:

120 GWRDC Budget Statements  implementing the Grains Industry National RD&E Strategy  improving grains industry productivity, and helping the industry to adapt to the effects of climate change  improving the management of water, nutrients, weeds and diseases  consolidating new wheat classification arrangements  breeding new pulse varieties  protecting the Australian grains industry from exotic pest and disease incursions  building industry and research capacity. The following table provides examples of GRDC investments in key areas in 2011–12.

Overview of GRDC investments in strategic R&D priority areas in 2011–12

Collaboration on the  Implementation of the National Grains RD&E Strategic Plan, national RD&E including by partially supporting an executive officer and framework participating in the implementation committee. Productivity  The work of Pulse Breeding Australia, which aims to deliver improvement superior pulse varieties for Australian growers.  Research to:  improve monitoring of crop performance  improve control of crop diseases such as Rhizoctonia  produce alternative sources of fertiliser products. Climate change  Work undertaken by the Australian national frost program, particularly phenotyping to identify sources of frost tolerance.  Examination of the impact of elevated carbon dioxide on grain quality and disease dynamics.  Modelling tools for growers, with information for each agroecological zone, for management practices under various climate scenarios. Sustainable  Improved water use efficiency, underpinned by work such as environmental that of the Australian Centre for Plant Functional Genomics. resource management  Research to identify and describe the impacts of tillage on soil properties and processes.  Development of a pesticide and fertiliser stewardship program.  Glyphosate sustainability. Maintaining and  Wheat variety classification, which links wheat breeding with improving overseas and domestic markets. international market  Work to understand, model and validate spray drift reduction access opportunities approaches. and value chain effectiveness and  Partnering to bring ultra-low gluten barley and high amylose efficiency wheat to market.  Surveillance of grain to manage food and feed safety.

121 GRDC Budget Statements Biosecurity  Work on a biological control approach to crop protection, which will investigate new technologies for control of nematodes, diamondback moth and pathogenic fungi.  R&D undertaken through the Cooperative Research Centre for National Plant Biosecurity. Workforce, skills,  Training: education (capacity  for grain growers, particularly in grain storage and building) and diversity precision agriculture  for extension personnel and advisers  for researchers, including through awards. Evaluation  Evaluation of expected benefits (economic, environmental and social) from the GRDC’s investment in RD&E.  Econometric analysis of dynamic impacts of R&D as well as analysis of cost of production in the grains industry.

122 GWRDC Budget Statements

1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: CAC Act Body Grains Research and Development Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Propose d Total Actual of prior at Budget estim ate available year am ounts appropriation available in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Opening balance/Reserves at bank 159,150 - 159,150 149,317 REVENUE FROM GOVERNMENT Special appropriations 1 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grains R&D - 143,060 143,060 137,981 Total special appropriations - 143,060 143,060 137,981 Total funds from governm ent - 143,060 143,060 137,981 FUNDS FROM INDUSTRY SOURCES Levies2 - 84,835 84,835 82,680 less amounts paid to the CRF - (84,835) (84,835) (82,680) Total - - - - FUNDS FROM OTHER SOURCES Interest - 9,260 9,260 6,695 Grants Income - 3,273 3,273 5,800 Other - 3,918 3,918 4,680 Total - 16,451 16,451 17,175 Total net resourcing for agency 159,150 159,511 318,661 304,473 1 GRDC is not directly appropriated as it is a CAC Act body. Appropriations are made to the Department of Agriculture, Fisheries and Forestry (DAFF) which are then paid to GRDC and are considered 'departmental' for all purposes. 2 The levies collected under The Primary Industry Levies and Charges Collection Act 1991 are remitted to DAFF and transferred to the CRF. An equivalent amount of the GRDC management levy is paid by DAFF to GRDC under a special appropriation under the PIERD Act 1989.

All figures are GST exclusive CRF – Consolidated Revenue Fund

1.3 BUDGET MEASURES

The GRDC is not affected by any 2011–12 budget measures.

123 GRDC Budget Statements

Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

The GRDC’s single outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of the GRDC in achieving government outcomes.

Outcome 1: New information and products that enhance the productivity, competitiveness and environmental sustainability of Australian grain growers and benefit the industry and wider community, through planning, managing and implementing investments in grains research and development.

Outcome 1 Strategy Outcome 1 is delivered through four output groups, each corresponding to a line of business: Practices, Varieties, New Products, and Communication & Capacity Building. The output groups are supported by three enabling functions: Corporate Services, Corporate Strategy & Impact Assessment, and Legal & Procurement.

The GRDC’s five-year Strategic R&D Plan, Prosperity through Innovation, sets out objectives, strategies and performance indicators to achieve its outcome over the period from 2007–08 to 2011–12. The plan is based on four overarching corporate strategies: coordinate a national grains R&D agenda and portfolio, deliver against Australian Government priorities, grow and leverage total grains R&D investment, and ensure R&D is market-driven. These broad strategies are complemented by specific strategies for each output group.

Each year, the GRDC refines its investment portfolio to respond to changes in the business environment and the priorities of the Australian grains industry and the Australian Government, while retaining its focus on strategic goals. The GRDC’s Annual Operational Plan 2011–12 describes how the strategies set out in Prosperity through Innovation will be implemented and assessed in the year ahead, through detailed investment priorities, performance indicators and targets.

124 GWRDC Budget Statements Factors expected to influence the GRDC’s business environment in 2011–12 include:

 significant characteristics of the Australian and global grain markets, including

- changes in grain marketing arrangements

- the rate of recovery from the global financial crisis

- global food security issues

- volatility in grain prices and the cost of inputs relative to grain prices

- changing demand for grain and grain products

 the Australian grains industry’s need to

- lift productivity growth and profitability

- withstand, and take advantage of, increasingly volatile production levels and heir effects on prices

- understand the effects of agriculture on greenhouse gas emissions, and the effects of climate change on agriculture

 the implementation of the Grains Industry National Research, Development and Extension Strategy and recommendations arising from the work of the Productivity Commission and the Rural R&D Council.

125 GRDC Budget Statements Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1, by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: New inform ation and products that enhance 2010–11 2011–12 the productivity, com petitiveness and environm ental Estimated Estimated sustainability of Australian grain grow ers and benefit the actual expenses industry and w ider com m unity, through planning, expenses m anaging and im plem enting investm ents in grains $'000 $'000 Program 1: Grains Research and Developm ent Corporation Revenue from government Special appropriations 54,877 55,572 Revenues from industry sources 82,680 84,835 Revenues from other independent sources 17,175 16,451 Reserves 2,297 7,740 Total for Program 1 157,029 164,598 Outcom e 1 Totals by resource type Revenue from government Special appropriations 54,877 55,572 Revenues from industry sources 82,680 84,835 Revenues from other independent sources 17,175 16,451 Reserves 2,297 7,740 Total expenses for Outcom e 1 157,029 164,598

2010–11 2011–12 Average Staffing Level (num ber) 51 52

126 GWRDC Budget Statements

Contributions to Outcome 1

Program 1.1: Grains Research and Development Corporation

Program objective New information and products that enhance the productivity, competitiveness and environmental sustainability of Australian grain growers and benefit the industry and wider community, through planning, managing and implementing investments in grains research and development.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual departmental expenses: Grains Research and Development Corporation 157,029 164,598 143,360 130,585 129,146 Total program expenses 157,029 164,598 143,360 130,585 129,146

Program 1.1 Deliverables Efficient and effective investment in grains RD&E based on robust business cases and stakeholder input that will address the research priorities of the Australian Government and Australian grain growers and deliver:  profitable, innovative and integrated practices and technologies to growers  sustainable natural resource management practices for adoption on Australian grain farms  protection for Australia’s community, primary industries and environment from biosecurity threats  targeted GRDC extension and adoption activities that are leveraged through effective partnerships and delivered through appropriate channels  pre-breeding programs that are focused on agreed key traits including biotechnology traits  new grain varieties that meet market requirements  innovative national and international technologies relevant to the Australian grains industry through effective partnerships  new grain products with a focus on human health and nutrition, food safety and grain hygiene  a national approach to building industry and research capacity  targeted GRDC communication activities and demand-driven publications and products to increase the uptake of new varieties, grain products and farming practices.

127 GRDC Budget Statements

Program 1.1 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Grain grow ers adapting to climate 27% 40% Maintain Note1 Note1 change and mitigating on-farm Note2 program greenhouse gas emissions. target. Coordinated national investment 54% 60% Maintain Note1 Note1 in nutrient management research, Note3 program data management and target. communication. Effective management of w eed, 80% 90% Maintain Note1 Note1 disease and insect biosecurity Note4 program risks. target. Expanded participatory action 20% 40% Maintain Note1 Note1 research program to involve Note5 program grow ers, agribusiness netw orks target. and researchers in jointly developing comprehensive sustainable management solutions to farming challenges. Improved profiling of the GRDC Implement Maintain Maintain Note1 Note1 customer relationship management -ed. and and database. update. update. Improved access for grow ers 16,500 17,600 17,600 Note1 Note1 to technical w orkshops and Note6 training materials. Average annual increases in yield 1-2% 1-2% 1-2% Note1 Note1 for w heat, barley, pulses, canola and sorghum. New varieties meet 90% Maintain Maintain Note1 Note1 minimum disease standards for program program target environments. target. target. EPR and seed royalty Note7 Maintain Maintain Note1 Note1 compliance greater than 80%. program program target. target. Nationally coordinated 50% Maintain Maintain Note1 Note1 pre-breeding research to focus % program program of resources on agreed key traits. target. target. Breeders using genes, Note8 Maintain Maintain Note1 Note1 germplasm and enabling program program technologies developed in GRDC- target. target. supported research.

128 GWRDC Budget Statements 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators (continued) budget target year 1 year 2 year 3 Market acceptance for genetically Achieved. Maintain Maintain Note1 Note1 modified (GM) crops. program program target. target. Delivery platforms Technical Maintain Maintain Note1 Note1 developed for GM crops in milestone program program Australia. achieved. target. target. Paid advisers use National Variety 80% Maintain Maintain Note1 Note1 Trials (NVT) results to 80% or > 80% or > assist grow ers w ith their variety selections. The majority of relevant breeding 90% Maintain Maintain Note1 Note1 programs participate in NVT. 90% or > 90% or > Identify six new technologies and 100% 100% Maintain Note1 Note1 at least one new international Note9 program supplier, including unsolicited target. Development of robust business 100% all 100% Maintain Note1 Note1 cases to justify GRDC investment projects program and to attract co-investment. >$25K target. Existing and new partnerships to 100% 100% Maintain Note1 Note1 deliver technology to grow ers. program target. New products identified and 100% 100% Maintain Note1 Note1 market assessments undertaken program and new products tested under target. market conditions. A nationally coordinated Implement Maintain Maintain Note1 Note1 agricultural research capacity- -ed. program program building strategy. target. target. Support of a range of activities 100% Maintain Maintain Note1 Note1 designed to build skills and program program expertise that w ill equip the target. target. Australian grains industry w ith the capacity to continuously innovate. Implementation of a revised GRDC Implement Maintain Maintain Note1 Note1 communications strategy. -ed. program program target. target. Increased aw areness of the 91% in Maintain Maintain Note1 Note1 GRDC as assessed by Grow er 2010 90% or > 90% or > Delivery of a strategic media Note10 Maintain Maintain Note1 Note1 program focused on grow er program program activity on-farm to ensure target. target. information is delivered w hen it can be of most benefit.

2010–11 2011–12 2012–13 2013–14 2014–15 Key Perf ormance Revised Budget Forw ard Forw ard Forw ard Indicators (continued) budget target year 1 year 2 year 3 Increased collaboration in R&D Increased Maintain Maintain Note1 Note1 communication activities betw een f rom program program the GRDC and research partners. baseline. target. target. Enhanced inf ormation tools to Achieved Note1 2 Maintain Note1 Note1 address industry needs and Note1 1 program emerging technologies to ensure target. adoption by the grains industry and the w ider community. 129 GRDC Budget Statements 1 No Key Performance Indicators (KPIs) have been developed for forward years 2012–15. The next five year plan, for 2012–17, is currently under development. All current KPIs will maintain program targets. 2 27 per cent growers using climate risk management tools to manage climate variability-starting point in 2007. 3 54 per cent growers using nutrient budgeting. 4 80 per cent grower confidence in managing pests, weeds and diseases. 5 20 per cent growers adopting new or improved farming practices due to GRDC activity. 6 16,500 growers and industry representatives participating in GRDC funded activities. 7 Anecdotally ~70 per cent when the higher compliance of export trade desk is combined with the lower compliance in the domestic market - the deregulated environment for wheat marketing demands a new more encompassing method of measuring End Point Royalties (EPR) collection compliance, which is currently in development. 8 Australian researchers have access to key enabling technologies. 9 100 per cent each year achieve identification of six new technologies and at least one new international supplier. 10 Release six growth stage back pocket guides annually. 11 Six timely supplements reporting on GRDC funded research outcomes on topics identified by grain growers and GRDC’s national and regional panels as priority issues for the grains industry. Publication of eight adviser targeted update/information sheets (two nationally and two for each region). 12 Six timely supplements reporting on GRDC funded research outcomes on topics identified by grain growers and GRDC’s national and regional panels as priority issues for the grains industry. Publication of fact sheets on key on-farm issues identified as priorities.

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Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years The GRDC does not have any administered funds.

3.1.2 Special accounts The GRDC does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because GRDC has no indigenous specific expenses.

131 GRDC Budget Statements

3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Differences in agency resourcing and financial statements The financial statements are prepared on an accrual basis where revenues and expenses are recognised as and when the resources are received and used. The agency resourcing table recognises cash resources available to be used during the period and includes amounts recognised as revenue in previous periods.

3.2.2 Analysis of budgeted financial statements The GRDC’s budget estimates are indicative only. Changes in the operating environment may require revisions of revenue and expenses estimates in order to meet strategic priorities.

Budgeted comprehensive income statement

The GRDC is budgeting for an operating deficit of $7.7 million for 2011–12, which will be funded from its own accumulated reserves.

Own source income is estimated to be $101.3 million in 2011–12, an increase of $1.4 million from the 2010–11 estimated actual. This is mainly due to higher industry contributions and investment income but is also offset by decreases in grants and royalties income. Revenue from government is also expected to increase marginally in 2011–12. Industry contributions and revenue from government are based on current estimates of grain production and prices. It should be noted that these assumptions are very uncertain as grain prices can fluctuate significantly being influenced by both local and international markets. The volume of crop production is also strongly influenced by the amount of rainfall incurred in key cropping areas and is also very difficult to predict.

The GRDC is estimating total expenses of $164.6 million for 2011–12. This is an expected increase of approximately $7.6 million on the estimated actual for 2010–11 and primarily relates to higher R&D expenditure in 2011–12.

Budgeted balance sheet

The budgeted net asset position for 2011–12 of $138.2 million represents a decrease of $7.7 million from the 2010–11 estimated actual. The decrease is due to the budgeted operating deficit for 2011–12.

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3.2.3 BUDGETED FINANCIAL STATEMENTS TABLES

Table 3.2.1: Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 6,906 7,600 7,904 8,220 8,549 Supplier expenses 147,754 155,055 134,979 121,861 120,073 Depreciation and amortisation 369 443 477 504 524 Write-dow n and impairment of assets 2,000 1,500 - - - Total expenses 157,029 164,598 143,360 130,585 129,146 LESS: OWN-SOURCE INCOME Revenue Industry contributions 82,680 84,835 70,180 66,651 67,262 Interest 6,695 9,260 8,790 8,646 8,646 Grant income 5,800 3,273 - - - Royalties 2,841 1,600 1,600 1,600 1,600 Other revenue 1,839 2,318 2,450 2,202 1,988 Total revenue 99,855 101,286 83,020 79,099 79,496 Total ow n-source incom e 99,855 101,286 83,020 79,099 79,496 Net cost of (contribution by) services 57,174 63,312 60,340 51,486 49,650 Revenue from government 54,877 55,572 56,512 51,486 49,650 Surplus (Deficit) (2,297) (7,740) (3,828) - - Surplus (Deficit) attributable to the Australian Governm ent (2,297) (7,740) (3,828) - - Prepared on Australian Accounting Standards basis.

133 GRDC Budget Statements

Table 3.2.2: Budgeted departmental balance sheet (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents 24,344 42,498 43,421 44,635 41,373 Trade and other receivables 21,795 19,142 19,561 13,830 15,764 Investments accounted for under 1,124 1,124 1,124 1,124 1,124 the equity method Investments 134,806 114,806 104,806 104,806 104,806 Other investments 6,702 6,702 6,702 6,702 6,702 Total financial assets 188,771 184,272 175,614 171,097 169,769 Non-financial assets Land and buildings 5,498 5,302 5,106 4,910 4,714 Property, plant and equipment 393 474 539 591 633 Intangibles 313 385 439 479 509 Total non-financial assets 6,204 6,161 6,084 5,980 5,856 Assets held for sale Total assets 194,975 190,433 181,698 177,077 175,625 LIABILITIES Payables Suppliers 47,887 51,035 46,077 41,406 39,904 Total payables 47,887 51,035 46,077 41,406 39,904 Provisions Employee provisions 1,140 1,190 1,240 1,290 1,340 Total provisions 1,140 1,190 1,240 1,290 1,340 Total liabilities 49,027 52,225 47,317 42,696 41,244 Net assets 145,948 138,208 134,381 134,381 134,381 EQUITY* Reserves 85,090 73,914 66,557 65,421 66,361 Retained surplus 60,858 64,294 67,824 68,960 68,020 Total equity 145,948 138,208 134,381 134,381 134,381 * 'Equity' is the residual interest in assets after deduction of liabilities. Prepared on Australian Accounting Standards basis.

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Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Industry contributions 82,680 84,835 70,180 66,651 67,262 Revenue from government 55,301 58,225 56,093 57,217 47,717 Interest 6,695 9,260 8,790 8,646 8,646 GST received 14,775 15,506 13,498 12,186 12,007 Grants income 5,800 3,273 - - - Other 4,680 3,918 4,051 3,802 3,588 Total ca sh received 169,931 175,017 152,612 148,502 139,220 Cash us ed Employees 6,856 7,550 7,854 8,170 8,499 Suppliers 156,154 167,413 153,435 138,718 133,583 Total ca sh used 163,010 174,963 161,289 146,888 142,082 Net cash from (used by) operating activities 6,921 54 (8,677) 1,614 (2,862) INVESTING ACTIVITIES Cash received Investments 15,000 20,000 10,000 - - Total ca sh received 15,000 20,000 10,000 - - Cash us ed Purchase of property, plant 200 400 400 400 400 and equipment Investments 30,000 - - - - Other 1,282 1,500 - - - Total ca sh used 31,482 1,900 400 400 400 Net cash from (used by) investing activities (16,482) 18,100 9,600 (400) (400) Net increase (de crease) in cash held (9,561) 18,154 923 1,214 (3,262) Cash at the beginning of the reporting period 33,905 24,344 42,498 43,421 44,635 Cash at the end of the reporting period 24,344 42,498 43,421 44,635 41,373 Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Other Total earnings revaluation reserves equity reserve $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 60,858 3,361 81,729 145,948 Adjusted opening balance 60,858 3,361 81,729 145,948 Com prehensive incom e Surplus (deficit) for the period (7,740) - - (7,740) Total comprehensive income recognised directly in equity (7,740) - - (7,740) Transfers betw een equity components 11,176 - (11,176) - Estim ated closing balance as at 30 June 2012 64,294 3,361 70,553 138,208 Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources1 200 400 400 400 400 TOTAL 200 400 400 400 400 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 200 400 400 400 400 Total cash used to acquire assets 200 400 400 400 400 1 Includes the following sources of funding: – annual and prior year appropriations – donations and contributions – gifts – internally developed assets – proceeds from the sale of assets

Prepared on Australian Accounting Standards basis.

136 GWRDC Budget Statements Table 3.2.6: Statement of asset movements (2011–12) Land Buildings Other property, Intangibles Total plant and equipment $'000 $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 1,000 4,890 695 1,440 8,025 Accumulated depreciation/amortisation and impairment - (392) (302) (1,127) (1,821) Opening net book balance 1,000 4,498 393 313 6,204 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – other - - 200 200 400 Total additions - - 200 200 400 Other m ovem ents Depreciation/amortisation expense - (196) (119) (128) (443) As at 30 June 2012 Gross book value 1,000 4,890 895 1,640 8,425 Accumulated depreciation/amortisation - (588) (421) (1,255) (2,264) Closing net book balance 1,000 4,302 474 385 6,161 Prepared on Australian Accounting Standards basis.

137 GRAPE AND WINE RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources 145 1.1 Strategic direction statement 145 1.2 Agency resource statement 147 1.3 Budget measures 147 Section 2: Outcomes and planned performance 148 2.1 Outcomes and performance information 148 Section 3: Explanatory tables and budgeted financial statements 153 3.1 Explanatory tables 153 3.2 Budgeted financial statements 154

138 GRAPE AND WINE RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources

The Grape and Wine Research and Development Corporation (GWRDC) is a statutory authority established under the Primary Industries and Energy Research and Development Act 1989 (PIERD Act) and is also subject to the regulatory framework contained in the Commonwealth Authorities and Companies Act 1997 (CAC Act).

1.1 Strategic direction statement

The Australian wine sector continues to trade under difficult business conditions with our terms of trade, international competitors, strong retail pricing pressures and continuing consolidation in the retail sector combining to threaten the economic sustainability of many wine sector businesses.

Given the effects of adverse weather conditions in most production regions in late 2010 and early 2011, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) estimated in February 2011 that the national crush for the 2010–11 season will be approximately 1.5 million tonnes, down slightly on the figure of 2009–10.

GWRDC’s budget estimates were prepared on the assumption of a 1.705 million tonne crop. After these budget estimates were prepared and after ABARES verbally advised GWRDC of its national crush estimate, most of the inland and costal wine producing areas have experienced weather conditions that are detrimental to the size of the grape crop, including inundation of vineyards and unseasonal rain leading to disease pressures, so the risk to the budget estimates is on the downside.

GWRDC has commissioned a number of reviews over the past 12 months to provide the board and management with additional information to help GWRDC make better informed decisions about future investments. For example, last year a detailed scientific review of research and development related to soil health in viticulture and other related industries in Australia was undertaken. The review identified what is known about soil health, where gaps in knowledge occur and how these gaps might be addressed in future research and development that could be funded by the GWRDC. The effectiveness of the GWRDC’s leadership development investments was reviewed and the first year’s outcomes from the Regional Grassroots program were evaluated. The outcomes of these reviews will help shape future investment in these areas.

In 2011–12, GWRDC investment will continue to focus on answering researchable questions that help to underpin and support the Australian wine sector. New

139 GWRDC Budget Statements investment in 2011–12 will complement ongoing projects, however the scale of this investment is directly dependent on the size of the 2011 crop.

The GWRDC has a renewed focus on communicating the findings from its investment in research and development (R&D) with all of its stakeholders. GWRDC will build on the solid base of the Regional and Innovators Network extension programs to extend the new knowledge to its stakeholders. Only by adopting the results of research will Australia’s grapegrowers, winemakers and the wider community realise their investment in the research paid for by levies and the Australian Government’s matching contribution.

140 GWRDC Budget Statements

1.2 Agency resource statement

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: CAC Act Body Grape and Wine Research and Development Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Propose d Total Actual of prior at Budget estim ate available year am ounts appropriation available in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Opening balance/Reserves at bank 3,914 - 3,914 2,203 REVENUE FROM GOVERNMENT Paym ents from related entities 1 Amounts from the portfolio department - 330 330 420 Total - 330 330 420 Special appropriations 2 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Grape and Wine R&D Corporation - 24,939 24,939 25,853 Total special appropriations - 24,939 24,939 25,853

Total funds from governm ent - 25,269 25,269 26,273 FUNDS FROM INDUSTRY SOURCES Levies3 - 11,936 11,936 11,092 less amounts paid to the CRF - (11,936) (11,936) (11,092) Total - - - - FUNDS FROM OTHER SOURCES Interest - 240 240 295 Other - - - - Total - 240 240 295 Total net resourcing for agency 3,914 25,509 29,423 28,771 1 Funding provided by Department of Agriculture, Fisheries and Forestry (DAFF) in respect of the Australia's Farming Future: Climate Change Research Program (2011–12: $330 000; 2010–11: $420 000). 2 GWRDC is not directly appropriated as it is a CAC Act body. Appropriations are made to DAFF which are then paid to GRWDC and are considered 'departmental' for all purposes. 3 Levies comprise the Grape Research and Development Levy and the Wine Research and Development Levy, imposed by the Primary Industries (Excise) Levies Act 1999.

CRF – Consolidated Revenue Fund. All figures are GST exclusive.

1.3 Budget measures

GWRDC is not affected by any 2011–12 budget measures.

141 GWRDC Budget Statements

Section 2: Outcomes and planned performance

2.1 Outcomes and performance information

Government outcomes are the intended results, impacts or consequences of actions by the government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs that contribute to government outcomes over the budget and forward years.

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of GWRDC in achieving government outcomes.

Outcome 1: The generation of new information that enhances the profitability, international competitiveness and sustainability of the Australian wine industry through investment in research and development.

Outcome 1 Strategy GWRDC expects to continue with its key investments with research organisations such as the Australian Wine Research Institute, National Wine Grape Industry Centre, CSIRO, various universities, state departments and other providers to generate new knowledge in line with stakeholder priorities. The GWRDC will work to encourage collaboration and build synergies between research providers to maximise research outcomes. It will also continue to invest in extension and adoption activities, such as the Regional and Innovators Network extension programs, to help grapegrowers, winemakers and the wider community benefit from the research they fund through levies and the Australian Government’s matching contribution.

142 GWRDC Budget Statements

Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1, by program.

Table 2.1: Budgeted expenses for Outcome 1 Outcom e 1: The generation of new inform ation that 2010–11 2011–12 enhances the profitability, international com petitiveness Estimated Estimated and sustainability of the Australian w ine industry through actual expenses investm e nt in research and developm ent. expenses $'000 $'000 Program 1.1: Grape and Wine Research and Developm ent Corporation Revenue from government Payment from related entities 420 330 Special appropriations 24,568 25,058 Revenues from other independent sources 2,083 698 Total for Program 1.1 27,071 26,086 Outcom e 1 Totals by resource type Revenue from government Payment from related entities 420 330 Special appropriations 24,568 25,058 Revenues from other independent sources 2,083 698 Total expe nses for Outcom e 1 27,071 26,086

2010–11 2011–12 Average Staffing Level (num ber) 12 12

143 GWRDC Budget Statements

Contributions to Outcome 1

Program 1.1: Grape and Wine Research and Development Corporation

Program objective The generation of new information that enhances the profitability, international competitiveness and sustainability of the Australian wine industry through investment in research and development.

Program expenses Program expenditure is expected to decrease over the forecast period as a result of lower revenues from anticipated reductions in crop sizes. This effect will be partially offset over the next two years as the corporation utilises its reserves to meet the growing challenges over the forward estimates period. It is expected that once reserves approach the targeted figure of $3.5 million that GWRDC will reduce its program expenditure to around $23.7 million to achieve a balanced budget position from 2013–14 onwards. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual departmental expenses: Grape and Wine Research and Development Corporation 27,071 26,086 24,009 22,732 22,863 Total program expens es 27,071 26,086 24,009 22,732 22,863

Program 1.1 Deliverables Market and consumer understanding – understanding consumers and markets in a changing business environment to enhance the Australian wine sector’s international competitiveness.  Identify market opportunities.  Develop and apply qualitative and quantitative tools to measure consumer behaviour and preferences.  Support the collection of timely and accurate information on key markets for wine.  Assist in the identification of current and potential trade barriers.  Support the development of innovative solutions to technical and regulatory issues. Winemaking excellence – investment in strategic research that advances the Australian wine sector’s understanding of winemaking technologies and practices to enhance profitability.  Develop novel yeasts and expand knowledge of microbiology and fermentation technologies.  Develop and test practical methods to articulate and understand desirable attributes in wine.  Develop objective measurement tools to inform wine design.  Support the development of knowledge and technical solutions to eliminate wine faults and maintain product integrity.  Quantify the variables associated with the maintenance of wine quality during transport and storage.  Determine and disseminate best practice vineyard logistics management. Grapes for purpose – investment in strategic research that advances the Australian wine sector’s understanding of viticultural technologies and practices to enhance profitability.

144 GWRDC Budget Statements

 Benchmark vineyard inputs and costs.  Investigate and develop grapevine germplasm.  Investigate and develop grapevine rootstocks.  Identify and enhance viticultural control of measurable grape characteristics that translate to specific wine attributes. Sustainability of industry, environments and communities – investment in strategic research that advances the Australian wine sector’s tools and management practices that will assist the sector adapt to a range of difficult environmental challenges, thus enhancing sustainability.  Disseminate vine health and pest management practices.  Investigate and disseminate methods of improving sustainable viticultural practices.  Disseminate and maintain Australia’s ‘green credentials’ throughout the supply chain.  Collaborate with other parties to determine and disseminate the effects of climate change on the wine sector.  Partner with national and international agencies to avert biosecurity threats.  Help train future wine sector researchers and sector leaders. Smart science, practical solutions – GWRDC communication and extension initiatives encourage the adoption of innovative practices in the Australian wine sector. GWRDC has efficient administration and sound corporate governance.  Provide access to relevant information through GWRDC’s website and other publications.  Evaluate performance to ensure that there are adequate returns to stakeholders from R&D investments.  Fund GWRDC’s Innovators Network, Regional Program and other extension activities.  Maximise investment funds by continuously reviewing and improving the efficiency of GWRDC’s administrative and corporate governance functions.

145 GWRDC Budget Statements

Program 1.1 Key performance indicators The key performance indicators (KPIs) shown below are designed to demonstrate whether or not GWRDC’s investments have generated new information and whether that new information has enhanced the profitability, international competitiveness and sustainability of the Australian wine sector. Two measures are designed to indicate whether R&D projects have been funded in line with the approved Annual Operational Plan and actively managed. A third measure focuses on the new information generated by the projects and recognition of its value through publication in peer-reviewed journals. Finally, GWRDC’s programs will only be used by the sector if they are successful in delivering useable information that makes a difference to growers and winemakers. The final two KPIs measure participation in two of GWRDC’s key extension programs as a proxy measure for adoption of research outcomes. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Research and development New 95% 96% 97% 98% projects are funded in line w ith the measure. approved Annual Operating Plan. Research and development New 100% 100% 100% 100% contracts are actively managed measure. through regular and ongoing monitoring of the research The outcomes of funded research New 10 per 10 per 10 per 10 per are recognised and promoted measure. annum. annum. annum. annum. through publication in peer- review ed international journals.* Increased number of Innovators 160 320 400 450 500 Netw ork members. Maintain number of key regions 11 11 11 11 11 participating in Regional Program. * Predicting the number of articles published is difficult and out of the GWRDC’s control. However, based on previous years this measure seems attainable.

146 GWRDC Budget Statements

Section 3: Explanatory tables and budgeted financial statements

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the budget year 2011–12. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, special accounts and government indigenous expenditure.

3.1 Explanatory tables

3.1.1 Movement of administered funds between years GWRDC does not have any administered funds.

3.1.2 Special accounts GWRDC does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because GWRDC has no indigenous specific expenses.

147 GWRDC Budget Statements

3.2 Budgeted financial statements

3.2.1 Differences in agency resourcing and financial statements The agency resourcing statement is cash based and so will differ from the comprehensive income statement (Table 3.2.1) because of the effect of the movement of trade and other receivables on revenues from government and interest.

In addition, the agency resourcing statement includes an opening balance based on cash and cash equivalents. The estimated net assets of the corporation at 30 June 2011, shown in table 3.2.2: Budgeted departmental balance sheet, also includes non-cash assets and liabilities therefore the agency resourcing statement opening balance does not equal the estimated net assets of GWRDC at 30 June 2011.

3.2.2 Analysis of budgeted financial statements GWRDC derives revenue from a levy on an agricultural crop that is based on the tonnage of fruit grown and processed for wine. The bulk of GWRDC’s expenses are R&D contracts, varying in duration from one year to seven years.

Budgeted revenue in any one year is based on crop forecasts available from the Australian Bureau of Agricultural and Resource Economics and Sciences at the time of budgeting. The estimated financial position of GWRDC for the 2011–12 financial year is expected to be less favourable than earlier projections. It has proved difficult in the past to accurately determine the amount of revenue that will be available from a particular year’s crop and GWRDC has generally taken a conservative budgeting approach.

After considering the sector’s current efforts to improve the balance between supply and demand and GWRDC’s experience in underestimating crop sizes, revenues for the forward estimates period have been set at 1.705 million tonnes, although there is a higher risk than usual that actual crop sizes may fall short of this level due to adverse weather conditions during the growing season.

Another risk to revenue over the forecast period is the lower than average grape prices currently being achieved by growers, as this may reduce the value of gross value of production and consequently the amount of Australian Government matching revenue that GWRDC will receive. This is being monitored and may result in downward revenue revisions in future years.

Expenditure has been estimated at a level to bring GWRDC’s accumulated reserves down towards the board’s target level of $3.5 million. This approach is designed to maintain some flexibility in future years if crop sizes are smaller than expected. However, there is a limit to this flexibility, and if the risks to revenue identified above are experienced, then a downward revision to R&D expenditure will be the likely result.

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3.2.3 Budgeted financial statements tables Table 3.2.1: Budgeted departmental comprehensive income statement (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 1,423 1,492 1,492 1,492 1,492 Supplier expenses 1,305 1,409 1,573 1,715 1,767 Grants 24,215 23,073 20,847 19,438 19,496 Depreciation and amortisation 128 112 97 87 108 Total expe nses 27,071 26,086 24,009 22,732 22,863 LESS: OWN-SOURCE INCOM E Ow n-source revenue Interest 293 234 196 212 212 Other 334 30 - - - Total ow n-source revenue 627 264 196 212 212 Total ow n-source incom e 627 264 196 212 212 Net cost of (contribution by) services 26,444 25,822 23,813 22,520 22,651 Revenue from government 24,568 25,058 23,351 22,708 22,708 Surplus (Deficit) (1,876) (764) (462) 188 57 Surplus (Deficit) attributable to the Australian Governm ent (1,876) (764) (462) 188 57 Prepared on Australian Accounting Standards basis.

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Prepared on Australian Accounting Standards basis.

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Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Interest 295 240 197 211 212 Net GST received 2,417 2,394 2,326 2,276 2,270 Other 26,273 25,269 23,341 23,105 22,708 Total ca sh received 28,985 27,903 25,864 25,592 25,190 Cash us ed Employees 1,423 1,492 1,492 1,492 1,492 Suppliers 1,456 1,554 1,706 1,880 1,947 Other 28,358 25,420 23,080 21,905 21,586 Total ca sh used 31,237 28,466 26,278 25,277 25,025 Net cash from (used by) operating activities (2,252) (563) (414) 315 165 INVESTING ACTIVITIES Cash received Investments 4,176 - - - - Total ca sh received 4,176 - - - - Cash us ed Purchase of property, plant and equipment 213 140 50 90 40 Total ca sh used 213 140 50 90 40 Net cash from (used by) investing activities 3,963 (140) (50) (90) (40) Net increase (de crease) 1,711 (703) (464) 225 125 in cash held Cash and cash equivalents at the beginning of the reporting period 2,203 3,914 3,211 2,747 2,972 Cash and cash equivalents at the end of the reporting period 3,914 3,211 2,747 2,972 3,097 Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Other Contributed Total earnings revaluation reserves equity/ equity reserve capital $'000 $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from 4,576 - - - 4,576 previous period Adjusted opening balance 4,576 - - - 4,576 Com prehensive incom e Surplus (deficit) for the period (764) - - - (764) Total comprehensive income (764) - - - (764) Estim ated closing balance as at 30 June 2012 3,812 - - - 3,812 Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources1 213 140 50 90 40 TOTAL 213 140 50 90 40 Prepared on Australian Accounting Standards basis. 1 Includes the following sources of funding: – annual and prior year appropriations – internally developed assets – s. 31 relevant agency receipts – proceeds from the sale of assets.

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Table 3.2.6: Statement of Asset Movements – Departmental Other property, Intangibles Total plant and equipment $'000 $'000 $'000 As at 1 July 2011 Gross book value 459 606 1,065 Accumulated depreciation/amortisation and impairment (324) (192) (516) Opening net book balance 135 414 549 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – other 40 100 140 Total additions 40 100 140 Other m ovem ents Depreciation/amortisation expense (34) (78) (112) As at 30 June 2012 Gross book value 499 706 1,205 Accumulated depreciation/amortisation and impairment (358) (270) (628) Closing net book balance 141 436 577 Prepared on Australian Accounting Standards basis.

153 RURAL INDUSTRIES RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources 163 1.1 Strategic direction 163 1.2 Agency resource statement 165 1.3 Budget measures 165 Section 2: Outcomes and planned performance 166 2.1 Outcomes and performance information 166 Section 3: Explanatory tables and budgeted financial statements 171 3.1 Explanatory tables 171 3.2 Budgeted financial statements 172

154 RURAL INDUSTRIES RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION

The Rural Industries Research and Development Corporation (RIRDC) contributes to the productivity and sustainability of Australia through investing in research, development and extension (RD&E) which promotes rural innovation.

RIRDC’s outcome is:

Increased knowledge that fosters sustainable, productive and profitable new and existing rural industries and furthers understanding of national rural issues through research and development in government-industry partnership.

During the coming year, RIRDC will prepare a new five-year Strategic Plan 2012–2017 (Plan). The Plan will identify the new strategic investment priorities for RIRDC across its three lines of investment:

• new and emerging rural industries

• established rural industries

• national rural issues.

RIRDC will seek the views of government and industry stakeholders to help it determine its priorities for investment for the next five years. Global and domestic drivers impacting on Australian agricultural productivity, sustainability and prosperity will also be built into the Plan.

RIRDC will continue its transformation toward a more efficient and effective business model which will enable more RIRDC funding to be directed to RD&E. This includes implementation of a new research investment framework including a life cycle approach to RIRDC support for new, emerging and established industries.

RIRDC is uniquely placed in the family of rural Research & Development Corporations (RDCs) to increase its role in coordinating investment in public good cross-sectoral issues which impact across the primary industries. RIRDC will actively seek to broker collaboration across the rural industries to address issues of shared priority.

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RIRDC focus areas include:

• Productivity growth – targeting research investments that increase productivity growth in RIRDC’s established industries to assist those industries to remain globally and locally competitive and adapt to changing environmental, economic and social influences.

• Climate change and variability – undertaking research to mitigate against climate change aimed at reducing agriculture’s carbon footprint and identifying new production opportunities such as the diversification and development of new native and introduced plants and animals.

• Maintaining and improving international market access opportunities – RIRDC will continue its leadership by delivering research outcomes that Australian agriculture can use to better compete internationally such as analysis of markets, market access issues and developing new products specific to overseas market needs.

• Biosecurity – Working with specific industries, RIRDC will support biosecurity research for example in the honeybee and chicken meat industries.

• Weeds – Completing of the National Weeds Productivity Research Program and working with government and stakeholders to identify priorities for a future program of investment to address weeds and productivity issues.

• Diversity, skills and education – RIRDC will support a range of leadership and capacity building initiatives. These include the Rural Women’s Award, Investing in Youth, ABC’s Heywire, and a new five year research and development (R&D) plan to support rural development for Aboriginal and Torres Strait Island people.

• New and emerging industries – investment in research that helps develop new plant and animal industries which demonstrate potential to be commercially competitive in Australia. Capacity building will also be supported such as through New Rural Industries Australia and Bioenergy Australia.

• Collaboration – RIRDC will continue to lead and expand its collaborations to address public good rural industry issues with a range of industry and government bodies. Current collaborations include the Collaborative Partnership for Farming and Fishing Health and Safety, the Investing in Youth program, and the Methane to Markets program.

• Evaluation – RIRDC will undertake evaluations of its program investments and continue to contribute to cross-RDC evaluation exercises designed to measure the effectiveness and impact of our R&D investments.

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1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all origins. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: CAC Act Body Rural Industries Research and Development Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Propose d Total Actual of prior at Budget estim ate available year am ounts appropriation available in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Opening balance/Reserves at bank 10,129 - 10,129 16,456 REVENUE FROM GOVERNMENT Paym ents from related entities 1 Amounts from the portfolio department - 15,408 15,408 10,243 Total - 15,408 15,408 10,243 Special appropriations 2 Primary Industries and Energy Research and Development Act 1989, s. 30(3) – Rural Industries R&D Corporation - 7,190 7,190 5,210 Total special appropriations - 7,190 7,190 5,210 Total funds from governm ent - 22,598 22,598 15,453

FUNDS FROM INDUSTRY SOURCES Levies3 - 4,203 4,203 2,356 less amounts paid to the CRF - (4,203) (4,203) (2,356) Total - - - - FUNDS FROM OTHER SOURCES Interest - 221 221 267 Royalties - 80 80 120 Sale of goods and services - - - 87 Other - 3,448 3,448 7,999 Total - 3,749 3,749 8,473 Total net resourcing for agency 10,129 26,347 36,476 40,382 1 Appropriation Bill (No.1) 2011–12. 2 RIRDC is not directly appropriated as it is a CAC Act body. Appropriations are made to the Department of Agriculture, Fisheries and Forestry (DAFF) which are then paid to RIRDC and are considered 'departmental' for all purposes. 3 Levies pursuant to section 5 of the Primary Industries and Energy Research and Development Act 1989.

All figures are GST exclusive CRF – Consolidated Revenue Fund

1.3 BUDGET MEASURES

RIRDC is not affected by any 2011–12 budget measures.

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Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

RIRDC’s outcome is described below together with its related program, specifying the performance indicators and targets used to assess and monitor the performance of RIRDC in achieving government outcomes.

Outcome 1: Increased knowledge that fosters sustainable, productive and profitable new and existing rural industries and furthers understanding of national rural issues through research and development in government-industry partnership. Outcome 1 Strategy RIRDC’s Outcome 1 strategy is to invest in R&D to respond to key drivers which have been identified by our government and industry stakeholders as follows:

(i) for new rural industries

• where significant export or domestic market opportunities exist

• where Australian industry has a competitive advantage

• that will be attractive to producers to enter and expand the industry

• provide options to producers for diversification and adaptation to climate change

(ii) in RIRDC’s established rural industries

• enhance productivity and sustainability

• in areas identified by government and industry as a high priority

• that promote development and uptake of innovative technologies and solutions

(iii) in National R&D to support

• rural policy priorities of government

• the priorities of rural industries and communities

• topics that are cross-sectoral and best addressed in collaboration rather than individually

• where partners support co-investment.

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Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1 by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: Increased know ledge that fosters 2010–11 2011–12 sustainable, productive, and profitable new and existing Estimated Estimated rural industries and furthers understanding of national actual expenses rural issues through research and developm ent in expenses governm ent-industry partnerships. $'000 $'000 Program 1.1: Rural Industries Research and Developm ent Corporation Revenue from government Ordinary annual services 10,243 15,408 Special appropriation 5,210 7,190 Revenues from industry sources 14,252 4,579 Revenues from other independent sources 394 301 Total for Program 1.1 30,099 27,478 Outcom e 1 Totals by resource type Revenue from government Ordinary annual services 10,243 15,408 Special appropriation 5,210 7,190 Revenues from industry sources 14,252 4,579 Revenues from other independent sources 394 301 Total expenses for Outcom e 1 30,099 27,478

2010–11 2011–12 Average Staffing Level (num ber) 27 27

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Contributions to Outcome 1

Program 1.1: Rural Industries Research and Development Corporation

Program objective Increased knowledge that fosters sustainable, productive and profitable new and existing rural industries and furthers understanding of national rural issues through research and development in government-industry partnership.

Program expenses 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual Departmental Expenses: Rural Industries Research and Development Corporation 30,099 27,478 22,971 23,341 23,881 Total program expens es 30,099 27,478 22,971 23,341 23,881

Program 1.1 Deliverables RIRDC’s corporate deliverable in 2011–12 will be its new five-year strategic plan for 2012 to 2017. Under the framework of its Strategic Plan RIRDC will deliver outcomes through three lines of investment which are: New and Emerging Rural Industries program  Invest in research into new animal and plant industries that will provide options for rural industry and communities to respond to climate change, such as drought tolerant grains and fruits, oilseeds, native grasses, native foods, native and introduced animals and explore new plant opportunities in Northern Australia.  Assist new industries in cyclone-risk areas to evaluate and adopt risk-mitigation practices.  Implement the Primary Industries Ministerial Council National R&DE Strategies for New and Emerging Industries, and biofuels and bioenergy.  Investigate new feedstocks for biofuels and bioenergy.  Explore the potential for a new Methane to Markets program for intensive livestock farming and processing industries.  Support further development of New Rural Industries Australia (NRIA).  Undertake industry stocktakes for the native food and wildflower industries to identify new research and development priorities.  Invest in research and development to support establishment of an Australian Standard for olive oil.  Provide the data to achieve a range of minor use permits for Australian tea tree oil.  With industry fund research to identify an effective response to myrtle rust for the native foods, tea tree oil, essential oils, plant extracts and wildflowers industries.  Expand value adding opportunities from plant extract waste products for additional income using innovative extraction technologies, such as nutraceuticals.  Prepare new research and development priorities with industry for the rare and natural fibre, kangaroo, buffalo and deer industries commencing in 2012. Established Rural Industries program  Develop and implement a detailed plan for future chicken meat nutrition research and development.

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 Complete a life cycle assessment for the chicken meat industry and update the chicken meat industry’s Environmental Management System documents.  Complete research for the chicken meat industry which addresses biosecurity and productivity issues such as development and implementation of improved diagnostic tests for detection of key poultry pathogens, and development of enhanced nutritional strategies to improve bird productivity.  Establish whether there are business cases for new strategic collaboration opportunities such as a Sustainable Food and Fibre Program and the influence of climate-energy- water-carbon on agricultural productivity.  Support the horse industry toward an industry statutory research and development levy.  Deliver research outcomes to the horse industry which include diagnosis of strongyle parasites of horses, occurrence of osteochondrosis dissecans in Thoroughbred foals and the epidemiological investigation into the 2007 equine influenza outbreak.  Support the development of training programs in racehorses to prevent injury.  Implement the new Rice Five Year Research and Development Plan 2012–2017.  Implement the new Rice Breeding Partnership between SunRice, NSW Industry and Investment and RIRDC.  Support the fodder industry toward an industry statutory levy.  Complete research into Annual Rye Grass Toxicity and continue research into hay varieties which better suit climate extremes and increase oaten hay breeding efficiency.  Support the pasture seed industry toward an industry statutory research and development levy.  Complete pasture seed research, including examination of blue banded bees as pollinators for lucerne seed, and research which increases pasture seed productivity. National Rural Issues program: • Support Investing in Youth Studentships 2010 with sponsors from RDCs, government and the private sector. • Sponsor Course 19 of the Australian Rural Leadership Program and ABC Heywire 2012. • Deliver the 2012 Australian RIRDC Rural Women's Award and maintain Alumni network. • Complete Farming and Fishing Health and Safety Program projects in the final year of the current plan. • Complete a new five-year research plan for farming and fishing health and safety involving co-investment by RDCs, government and the private sector. • Complete the National Weeds and Productivity Program with project final reports published by January 2013. • Complete a new funding proposal for the National Weeds and Productivity Research Program from 1 July 2012 to 30 June 2015. • New RD&E investments made under the Dynamic Rural Communities R&D Plan, 2009–14, which address supplying skilled labour for primary industries; rural business opportunities from broadband; transformation of rural communities; and strategic opportunities in rural land and water management. • New RD&E investments commissioned under the Aboriginal and Torres Strait Islander Rural Development R&D Plan, 2010–15 addressing new opportunities for Indigenous participation in primary industries, rural tourism and land and water management. • Complete research into international and domestic trade-related issues, including trade-related aspects of climate change. • Investigate the drivers and issues associated with Australian agricultural productivity and invest in food security research in the context of Australia being a global food supplier. • Fund research into the role of foreign investment in Australian agricultural supply chains. • Lead establishment of appropriate life cycle assessment methodologies for agriculture. • Support the Climate Change Research Strategy for Primary Industries and support

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more accurate climate forecasts through the Managing Climate Variability program.

Program 1.1 Key Performance Information RIRDC evaluates its key performance indicators for the three research and development portfolios against the following: • Sector five-year R&D plans are meeting their objectives to provide the knowledge - for diversification in Australia’s rural industries - increasing the profitability, resilience and sustainability of RIRDC’s established industries - to address national rural issues and to meet the needs of industry, community and government • Demonstrating high level of support from industry, government stakeholders and partners through regular stakeholder surveys and continuing investment and co-investment • Implementation of a revised strategy of implementation of RIRDC’s knowledge investments - leading to adoption of new technologies and industries - adoption of knowledge to increase profitability - resilience and sustainability of RIRDC’s established industries - adoption of knowledge to address national rural issues demonstrated by client surveys and program evaluations. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Improve delivery effectiveness 85% 90% 90% 90% 90% including in access to the information provided to industry, evidenced by new delivery mechanisms and stakeholder satisfaction w ith access. Level of satisfaction of stake-holders Sector five year research and 85% 85% 85% 85% 85% development plans are meeting their objectives. Evaluate projects, programs and 3:1 3:1 3:1 3:1 3:1 portfolios to show a strongly positive return on investment. RIRDC's R&D investments address 95% 95% 95% 95% 95% the government's National and Rural Research Priorities, priorities of industry partners and optimises partnerships w ith other research agencies.

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Section 3: Explanatory tables and budgeted financial statements

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses, movements in administered funds, special accounts and government indigenous expenditure.

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years RIRDC does not have any administered funds.

3.1.2 Special accounts RIRDC does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure Table 3.1.1: Australian Government Indigenous Expenditure Appropriations Other Total Program Bill Bill No. 1 No. 2 $'000 $'000 $'000 $'000 Rural Industries Research and Developm ent Corporation Outcom e 1 Increased know ledge that fosters sustainable, productive, and profitable new and existing rural industries and furthers understanding of national rural issues through research and development in government-industry partnerships. Departmental 2011–12 - - 200 200 1.1 Departmental 2010–11 - - 200 200 1.1 Total outcom e 2011–12 - - 200 200 Total outcome 2010–11 - - 200 200

Total AGIE 2011–12 - - 200 200 Total AGIE 2010–11 - - 200 200

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3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Analysis of budgeted financial statements RIRDC is budgeting for an operating loss of $6.255 million in 2010–11 and $1.053 million in 2011–12. The losses reflect the drawdown of existing cash reserves held in industry sub accounts primarily from income received in advance in previous years.

RIRDC’s balance sheet remains strong with total assets of $11.8 million in 2010–11 and $10.8 million in the forward years. Of the total assets of $11.8 million, approximately $10.0 million is represented by cash.

Payables to R&D providers and suppliers are the main liabilities in the balance sheet representing $1.7 million of the total $2.6 million expected in the budget and forward years. Employee entitlement liabilities are estimated at $0.9 million over the same period.

3.2.2 Budgeted financial statements tables Table 3.2.1: Budgeted departmental comprehensive income statement (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 3,778 3,780 3,932 4,088 4,252 Supplier expenses 3,885 3,518 2,744 2,817 2,930 Grants 22,226 19,977 16,070 16,191 16,454 Depreciation and amortisation 210 203 225 245 245 Total expenses 30,099 27,478 22,971 23,341 23,881 LESS: OWN-SOURCE INCOME Ow n-source revenue Sale of goods and rendering of 6 - - - - Interest 268 221 200 190 187 Royalties 120 80 135 140 140 Other 7,997 3,526 4,512 4,527 4,678 Total ow n-source revenue 8,391 3,827 4,847 4,857 5,005 Total ow n-source incom e 8,391 3,827 4,847 4,857 5,005 Net cost of (contribution by) services 21,708 23,651 18,124 18,484 18,876 Revenue from government 15,453 22,598 18,124 18,484 18,876 Surplus (Deficit) (6,255) (1,053) - - - Surplus (Deficit) attributable to the Australian Governm ent (6,255) (1,053) - - - Prepared on Australian Accounting Standards basis.

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Table 3.2.2: Budgeted departmental balance sheet (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents 10,129 9,069 8,775 8,776 8,781 Trade and other receivables 1,205 1,285 1,449 1,552 1,547 Total financial assets 11,334 10,354 10,224 10,328 10,328 Non-financial assets Property, plant and equipment 289 241 371 286 286 Intangibles 135 135 135 135 135 Other 71 72 74 76 76 Total non-financial assets 495 448 580 497 497 Total assets 11,829 10,802 10,804 10,825 10,825 LIABILITIES Payables Suppliers 465 476 461 466 466 Grants 1,135 1,131 1,128 1,125 1,125 Other 105 107 109 110 110 Total payables 1,705 1,714 1,698 1,701 1,701 Provisions Employee provisions 893 910 928 946 946 Other 51 51 51 51 51 Total provisions 944 961 979 997 997 Total liabilities 2,649 2,675 2,677 2,698 2,698 Net assets 9,180 8,127 8,127 8,127 8,127 EQUITY* Parent entity interest Reserves 450 450 450 450 450 Retained surplus 8,730 7,677 7,677 7,677 7,677 Total equity 9,180 8,127 8,127 8,127 8,127 * 'Equity' is the residual interest in assets after deduction of liabilities. Prepared on Australian Accounting Standards basis.

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Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Goods and services 87 - - 17 17 Appropriations 15,453 22,598 18,124 18,484 18,881 Interest 267 221 200 190 187 Net GST received 75 109 75 89 89 Other 8,119 3,528 3,725 4,548 4,699 Total ca sh received 24,001 26,456 22,124 23,328 23,873 Cash us ed Employees 3,762 3,763 3,721 4,070 4,234 Suppliers 4,230 3,631 2,738 2,903 3,016 Grants 22,216 19,967 15,804 16,194 16,457 Total ca sh used 30,208 27,361 22,263 23,167 23,707 Net cash from (used by) operating activities (6,207) (905) (139) 161 166 INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment 30 - - - - Total ca sh received 30 30 30 30 30 Cash us ed Purchase of property, plant and equipment 150 155 155 160 160 Total ca sh used 150 155 155 160 160 Net cash from (used by) investing activities (120) (155) (155) (160) (160) Net increase (de crease) in cash held (6,327) (1,060) (294) 1 6 Cash and cash equivalents at the beginning of the reporting period 16,456 10,129 9,069 8,775 8,776 Cash and cash equivalents at the end of the reporting period 10,129 9,069 8,775 8,776 8,782 Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Departmental statement of changes in equity—summary of movement (Budget year 2011–12) Retained Asset Other Contributed Total earnings revaluation reserves equity/ equity reserve capital $'000 $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 8,730 450 - - 9,180 Adjusted opening balance 8,730 450 - - 9,180 Com prehensive incom e Surplus (deficit) for the period (1,053) - - - - Estim ated closing balance as at 30 June 2012 7,677 450 - - 8,127 Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources1 150 155 155 160 160 TOTAL 150 155 155 160 160 1 Includes the following sources of funding: – annual and prior year appropriations – internally developed assets

Prepared on Australian Accounting Standards basis.

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Table 3.2.6: Statement of asset movements (2011–12) Other property, Intangibles Total plant and equipment $'000 $'000 $'000 As at 1 July 2011 Gross book value 996 409 1,405 Accumulated depreciation/amortisation and impairment (707) (274) (981) Opening net book balance 289 135 424 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – other 75 80 155 Total additions 75 80 155 Other m ovem ents Depreciation/amortisation expense (123) (80) (203) - As at 30 June 2012 Gross book value 1,071 489 1,560 Accumulated depreciation/amortisation and impairment (830) (354) (1,184) Closing net book balance 241 135 376 Prepared on Australian Accounting Standards basis.

168 SUGAR RESEARCH AND DEVELOPMENT CORPORATION

Agency overview and resources 179 1.1 Strategic direction statement 179 1.2 Agency resource statement 183 1.3 Budget measures 183 Section 2: Outcomes and planned performance 184 2.1 Outcomes and performance information 184 Section 3: Explanatory tables and budgeted financial statements 189 3.1 Explanatory tables 189 3.2 Budgeted financial statements 190

169 SUGAR RESEARCH AND DEVELOPMENT CORPORATION

Section 1: Agency overview and resources

The Sugar Research and Development Corporation (SRDC) is an Australian Government Statutory Authority established under the Primary Industries and Energy Research and Development Act 1989 (PIERD Act). It is also subject to the regulatory framework contained in the Commonwealth Authorities and Companies Act 1997 (CAC Act).

SRDC has a single outcome ‘A profitable, sustainable and internationally competitive Australian sugarcane industry providing economic, environmental and social benefits for rural and regional communities through targeted investment in research and development’. SRDC’s mission is ‘to foster an innovative and sustainable Australian sugarcane industry through targeted investment in research and development (R&D).’

1.1 STRATEGIC DIRECTION STATEMENT

SRDC develops a strategic view of the needs and opportunities for R&D in the sugarcane industry, in consultation with government, industry, research and community stakeholders. SRDC’s view is outlined in the SRDC R&D Plan 2007–2012 (the R&D Plan).

SRDC receives funding primarily from industry levies and government matching funding. SRDC annually assesses industry and government priorities and determines target issues for the annual call for projects. SRDC invests in research and development projects consistent with the target outcomes, key deliverables and strategies of the R&D Plan. 2011–12 is the fifth year of implementation of the R&D Plan, and at the end of the year SRDC will undertake a comprehensive analysis of the achievements made during the five years covered by the R&D Plan and assess impacts on industry productivity and sustainability.

The R&D Plan provides that SRDC’s activities will be focussed in three investment arenas:

 The Regional Futures Arena focuses on the implementation and/or integration of existing technologies or close-to-market emerging technologies to enhance the economic, environmental and social sustainability of regional sugarcane industries. Some R&D in this arena will be applicable to all or several regions, while in other cases R&D approaches may need to differ to fit the outcome that each region or mill area is seeking.

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 The Emerging Technologies Arena recognises that the industry is reliant on strategic research to sustain it into the future. R&D conducted in this arena will mainly involve research on frontier technologies or implementation of more- distant-from-market emerging technologies in the fields of breeding systems, farming, harvesting, milling and marketing systems, biotechnology and diversification.

 The People Development Arena recognises the need for a continued focus on improving the skills and capabilities of members of the sugarcane industry and improving the functioning of partnerships between industry, researchers, and the general community. This ensures that there is the capacity to realise the opportunities provided by more technical R&D.

The world’s production of sugarcane is forecast to continue increasing in 2011–12 and consumption of sugar is expected to increase slightly. Prices are expected to ease, although they will remain relatively high. Prices are expected to remain favourable for Australian sugarcane growers over the next couple of years as the industry recovers from the adverse effects of excessive rainfall over the harvesting season in 2010 and of Tropical Cyclone Yasi in early 2011. These climatic events left the industry with stand over cane, delayed planting and lower crop size. The effects of the climatic events are expected to have a very negative impact on sugar production for 2011–12 and at least two years hence.

The forecast income for SRDC from industry levies is expected to be lower in the next couple of years due to the adverse climatic events experienced by the industry.

SRDC is expecting to draw down on reserves to compensate for the lower income and to continue research needed by the industry. Requests for losses were approved by the Minister for Finance and Deregulation in January and April of 2011.

In the past year, the sugarcane industry has undertaken a review of the RD&E efforts within the industry. The review has acknowledged the importance of research for the Australian Industry. As stated in the report ‘The Australian raw sugar industry has a history of maintaining its international competitiveness through leading-edge research, development and extension (RD&E)’. While the RD&E effort has undoubtedly delivered real benefits to the industry, there is interest from the industry in a more effective, responsive and sustainable RD&E effort consistent with maintaining the Australian sugar industry’s global competitiveness. The review indicates that there is a need for industry to strengthen the current R&D capabilities and budget of BSES Ltd. Furthermore, the review also mentions the need for improved processes for setting research priorities, improved funding allocations across priorities, and improved processes to ensure efficiency and effectiveness of research. SRDC will continue working with industry to address these issues and to ensure that R&D continues to delivered value for money.

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In parallel to the review, SRDC in collaboration with other key industry stakeholders developed a National Sugarcane Industry RD&E Strategy (Strategy). The Strategy describes four industry goals (i.e. a growth industry, successfully competing in the world market through profitable businesses; successful diversification into related sugarcane products, using world class research and development; global leaders in environmental sustainability; dynamic and cooperative industry leadership) and 10 industry R&D themes, which relate closely to current and proposed investment plans of industry, university and government. RD&E providers and the Australian Sugar Industry Alliance (ASA) will lead the implementation of the strategy in collaboration with a research committee, in which SRDC and the Queensland Department of Employment, Economic Development and Innovation (DEEDI) will be represented. The implementation of the Strategy will commence in 2011–12. It is expected that SRDC’s direction will be guided by the Strategy and this will also guide the development of its new Five Year R&D Plan covering the period 2013–2018.

The sugar industry continues to face challenges of rationalisation and restructure. Examples of this are the 40 per cent reduction in the number of growers in the last decade, new players in the milling sector such as Wilmar International Ltd, and the closing down of Babinda Mill owned by Bundaberg Sugar. Other challenges for the industry ahead include the need to use technology and research to increase productivity, profitability and sustainability; to manage and control costs effectively; to improve information flow across the value chain and to improve the perception of the industry’s environmental impact.

The long term sustainability of the industry depends on fostering innovation and diversification into new products with limited impact on the environment, and investing in innovative improvements in sugarcane growing, harvesting, milling and sugarcane manufacture.

The SRDC research investments in 2011–12 seek to meet the challenges ahead by investing in innovation in value adding processes and products; new and improved sugarcane varieties, reduction of costs and improving utilisation of capital across the value chain; reduction of exotic biosecurity threats and improvements in the management of endemic pest and weeds; improving capacity of people to innovate and lead change; and in sustainable improvements in the face of climate variability.

A clear direction in SRDC’s agenda will be working in collaboration with other Rural Research and Development Corporations and other institutions to address common issues. Apart from a partnership with BSES Ltd to address farming systems issues, SRDC will continue its partnership in the Managing Climate Variability Program, and the Farming and Fishing Health and Safety Collaborative Partnership. Partnerships with Grains Research and Development Corporation (GRDC) are also in place to assess the nitrous oxide emissions from sugarcane production, and to explore optimisation of farming systems and diversification opportunities.

In 2011–12 high value outputs are expected from R&D activities supported by SRDC.

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In the Regional Futures Arena, the focus will remain on innovative farming, harvesting, transport, milling and marketing needs of the regions. To improve input applications to match soil capacity and reduce the risk of off-site impacts, new techniques will be developed for establishing zones for targeted application of best management practice within cane paddocks. To reduce harvesting costs, a harvest loss measurement system will be tested and trialled, and strategies to increase the bulk density of whole-crop will be tested to improve the efficiency and cost-effectiveness of the whole-crop harvesting process.

To understand the effect of sugarcane farming systems and the impacts on water quality, water quality trials will be conducted across the Herbert and Burdekin regions. To deal with climate change, a template for life cycle analysis of sugarcane growing, milling, refining and distilling operations will be developed for the assessment of individual company operations.

In the Emerging Technologies Arena, the focus will remain on enhancing breeding and genetic systems to expand the potential for the sugarcane plant to produce traditional and new products, to address biosecurity risks, to adapt to climate change and to develop specific varieties for energy generation.

In the People Development Arena SRDC will continue support to improve the capacity of the industry to innovate. SRDC will provide opportunities through the Capacity Building Program to travel and learn, through our Scholarships to build research skills, and through our Grower Group Innovation projects to support innovation trialling and adoption among growers.

SRDC will continue to place emphasis on the communication of the results of R&D funded. SRDC will work in partnership with researchers and industry to ensure the industry receives value from investment in research. SRDC has commissioned a review of our current processes of engagement and the development of a stakeholder engagement framework.

Finally, to ensure accountability SRDC will measure the return on investment and the broader impacts of its R&D through comprehensive ex post analyses as part of the evaluation program of the Rural R&D Corporations and in house evaluation frameworks for project monitoring. Furthermore, SRDC commissioned the review of its evaluation framework. Through the implementation of the improved monitoring and evaluation framework, SRDC seeks to reliably monitor and assess the value of its investments into research and development.

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1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: CAC Act Body Sugar Research and Development Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Propose d Total Actual of prior at Budget estim ate available year am ounts appropriation available in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Opening balance/Reserves at bank 8,552 - 8,552 9,990 REVENUE FROM GOVERNMENT Special appropriations 1 Primary Industries and Energy Research Development Act 1989, s. 30(3) – Sugar R&D Corporation - 9,644 9,644 9,731 Total special appropriations - 9,644 9,644 9,731 Total funds from governm ent - 9,644 9,644 9,731 FUNDS FROM INDUSTRY SOURCES Levies2 - 3,780 3,780 3,832 less amounts paid to the CRF - (3,780) (3,780) (3,832) Total - - - - FUNDS FROM OTHER SOURCES Interest - 428 428 500 Other - 20 20 32 Total - 448 448 532 Total net resourcing for agency 8,552 10,092 18,644 20,253 1 SRDC is not directly appropriated as it is a CAC Act body. Appropriations are made to the Department of Agriculture, Fisheries and Forestry (DAFF) which are then paid to SRDC and are considered 'departmental' for all purposes. 2 The levy is imposed and collected under the Primary Industries (excise) Levies Act 1999, Primary Industries Levies and Charges Collection Act 1991 and associated legislation.

All figures are GST exclusive CRF – Consolidated Revenue Fund

1.3 BUDGET MEASURES

SRDC is not affected by any 2011–12 budget measures.

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Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION Government outcomes are the intended results, impacts or consequences of actions by the government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs which contribute to government outcomes over the budget and forward years. Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of SRDC in achieving government outcomes.

Outcome 1: A profitable, sustainable and internationally competitive Australian sugarcane industry providing economic, environmental and social benefits for rural and regional communities through targeted investment in research and development.

Outcome 1 Strategy SRDC has a single outcome: A profitable, sustainable and internationally competitive Australian sugarcane industry providing economic, environmental and social benefits for rural and regional communities through targeted investment in research and development. SRDC’s primary strategy is to invest in R&D projects to deliver the outcome. Those projects are undertaken in one of the three investment arenas under the generic umbrella of activities defined in table 2.1. Projects in the Regional Futures Arena will deliver innovative farming, harvesting, transport, milling and marketing systems tailored to the needs and opportunities of each region. Projects focus on the implementation and/or integration of existing technologies or close-to-market emerging technologies for rapid delivery of benefits to members of regional industries. Projects in the Emerging Technologies Arena conduct strategic research on frontier technologies or implementation of more-distant-from-market emerging technologies across the value chain, but with a focus on enabling technologies for plant breeding, new products and revenue streams, and step changes in farming, harvesting, milling and marketing systems. Projects in the People Development Arena recognise that the skills and capabilities of members of the sugarcane industry, and the functioning of partnerships between industry, researchers, and the general community, can significantly impact the achievement of opportunities provided by technical R&D. Projects are conducted over varying periods of time, but most commonly between one and five years. Delivery of benefits can occur for several years after the conclusion of a project, as outputs are progressively adopted and refined by individual enterprises. Thus the large majority of the SRDC’s investments have a medium to longer term focus.

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Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1, by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: A profitable, sustainable and internationally 2010–11 2011–12 com petitive Australian sugarcane industry providing Estimated Estimated econom ic, environm ental and social benefits for rural and actual expenses regional com m unities through targeted investm ent in expenses research and developm ent. $'000 $'000 Program 1.1: Sugar Research and Developm ent Corporation Revenue from government Special appropriations 9,731 9,644 Revenues from other independent sources 1,810 2,190 Total for Program 1.1 11,541 11,834 Outcom e 1 Totals by resource type Revenue from government Special appropriations 9,731 9,644 Revenues from other independent sources 1,810 2,190 Total expenses for Outcom e 1 11,541 11,834

2010–11 2011–12 Average Staffing Level (num ber) 7 7

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Contributions to Outcome 1

Program 1.1: Sugar Research and Development Corporation

Program objective To assist the sugarcane industry to become more innovative, sustainable and competitive by effectively targeting and managing research expenditure; applying industry, scientific and community resources effectively; building the industry’s capacity to innovate; and communicating research outputs effectively.

Program expenses The forecast income for SRDC from industry levies is expected to be lower in the next two years due to adverse climatic events experienced in sugarcane growing regions and the negative impacts of these on production. SRDC is expecting to draw down on reserves to compensate for the lower income and to continue needed research in the industry. A request for losses was approved by the Minister for Finance and Deregulation in January 2011. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual departmental expenses: Sugar Research and Development 11,541 11,834 11,437 9,783 9,164 Total program expenses 11,541 11,834 11,437 9,783 9,164

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Program 1.1 Deliverables 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 New and continuing research and 133 110 95 90 95 development projects that address projects. projects. projects. projects. projects. priority investment areas outlined in the R&D Plan 2007–12 and provide information to industry to help enhance its profitability, international competitiveness and Distribute information 1362 hits 1200 hits 1300 hits 1400 hits 1500 hits through the w ebsite, e-new s and per month. per month. per month. per month. per month. rural and regional media. 20 media 24 media 24 media 25 media 26 media releases a releases a releases a releases a releases a year year year year year 10 industry 9 industry 9 industry 9 industry 9 industry magazine magazine magazine magazine magazine articles articles articles articles articles 11 editions 11 editions 11 editions 11 editions 11 editions of e- of e- of e- of e- of e- new sletter new sletter. new sletter. new sletter. new sletter. 1 Grow er Group R&D Results Booklet 5 fact sheets. Promote research findings through 7 research 24 events 24 events 24 events 24 events industry w orkshops, forums and seminars; a year. a year. a year. a year. extension activities. 7 R&D expos; 10 industry meetings, conferences and event present -ations. Stakeholder consultation meetings. Average 4 4 per 4 per 4 per 4 per per month. month. month. month. month. Provide support for people 21 Scholar- 20 aw ards. 20 aw ards. 19 aw ards. 17 aw ards. development through new and ships, continuing scholarships and 6 aw ards. innovation aw ards. 1 This includes Grower Group Innovation Projects and Capacity Building Projects.

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Program 1.1 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Maintain the extent to w hich 100% 100% 100% 100% 100% investments match priorities defined in Annual Operating Plan and R&D Plan. Improved access to R&D 15% of 20% of 25% of 30% of 30% of information provided to industry industry industry industry industry industry evidenced by increasing the accessing accessing accessing accessing accessing number of people accessing our our our our our our information. information. information. information. information. information. Improved return on investment of 7:1 ratio 4:1 4:1 4:1 4:1 portfolio of projects evidenced by evaluation on selected case Improved satisfaction of industry 60% of 65% of 70% of 75% of 80% of w ith the services provided as stakeholder stakeholder stakeholder stakeholder stakeholder measured by stakeholder s surveys s surveys s surveys s surveys s surveys satisfaction surveys at SRDC highly highly highly highly highly events and seminars. satisfied. satisfied. satisfied. satisfied. satisfied. Enhancement of the capacity of 3 3 3 3 3 people in the sugar industry to scholarship scholarship scholarship scholarship scholarship innovate through scholarships s aw arded; s aw arded; s aw arded; s aw arded; s aw arded; and Capacity Building Projects 10 10 10 10 10 aw arded. Capacity Capacity Capacity Capacity Capacity Building Building Building Building Building Projects Projects Projects Projects Projects aw arded; aw arded; aw arded; aw arded; aw arded; 1 Young 1 Young 1 Young 1 Young 1 Young Science Science Science Science Science and and and and and Innovation Innovation Innovation Innovation Innovation Aw ard Aw ard Aw ard Aw ard Aw ard granted; granted; granted; granted; granted; 1 TRAIL 1 TRAIL 1 TRAIL 1 TRAIL 1 TRAIL scholarship scholarship scholarship scholarship scholarship aw arded; aw arded; aw arded; aw arded. aw arded; 1 Nuffield 1 Nuffield 1 Nuffield 1 Nuffield

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Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years SRDC does not have any administered funds.

3.1.2 Special accounts SRDC does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because SRDC has no indigenous specific expenses.

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3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Analysis of budgeted financial statements The revenues both from government and industry levies are budgeted to decrease slightly in 2011–12. This is due to the flow on effect of climatic events (excessive rainfall over the harvesting season in 2010 and of Tropical Cyclone Yasi in early 2011) on the tonnage of sugar produced. Industry cropping estimates are around 27 million tonnes for 2011–12. We expect that the cropping estimates will improve to around 30 million tonnes in 2012–13, 31 million in 2013–14 and reach normal production of around 32 million by 2014–15. We have kept the gross value of production (GVP) at the same levels as 2010–11, which is lower than the estimate the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has of $1.271 million to account for any decrease in either the quantity of sugar or price fluctuations. We have also accounted for the income from government to be reduced over the next years. The reduction of the accumulated levy received from industry is expected to keep the future matching contribution from government at lower levels.

Given the industry need for research into priority issues identified by the industry, the SRDC Board and the Minister for Finance and Deregulation have approved the use of reserves. Therefore, the amount destined for future projects has increased in 2011–12. The use of reserves will also allow SRDC to maintain its level of investment in research in future years and compensate for the loss of income.

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3.2.2 Budgeted financial statements tables Table 3.2.1 Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 1,104 1,143 1,189 1,237 1,286 Supplier expenses 903 1,015 1,186 1,116 1,160 Grants 9,491 9,603 8,989 7,371 6,658 Depreciation and amortisation 43 73 73 59 60 Total expe nses 11,541 11,834 11,437 9,783 9,164 LESS: OWN-SOURCE INCOM E Ow n-source revenue Interest 500 428 339 214 181 Rental income 32 20 20 20 20 Total ow n-source revenue 532 448 359 234 201 Total ow n-source incom e 532 448 359 234 201 Net cost of (contribution by) 11,009 11,386 11,078 9,549 8,963 services Revenue from government 9,731 9,644 8,442 8,820 8,960 Surplus (Deficit) (1,278) (1,742) (2,636) (729) (3) Surplus (Deficit) attributable to the Australian Governm ent (1,278) (1,742) (2,636) (729) (3) Prepared on Australian Accounting Standards basis.

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Prepared on Australian Accounting Standards basis.

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Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Other Contributed Total earnings revaluation reserves equity/ equity reserve capital $'000 $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 9,830 - - - 9,830 Adjusted opening balance 9,830 - - - 9,830 Com prehensive incom e Surplus (deficit) for the period (1,742) - - - (1,742) Total comprehensive income (1,742) - - - (1,742) Estim ated closing balance as at 30 June 2012 8,088 - - - 8,088 Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources 203 104 150 - - TOTAL 203 104 150 - - RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 203 104 150 - - Total cash used to acquire assets 203 104 150 - - Prepared on Australian Accounting Standards basis.

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Table 3.2.6: Statement of asset movements (2011–12) Buildings Other property, Total plant and equipment $'000 $'000 $'000 As at 1 July 2011 Gross book value 362 31 393 Accumulated depreciation/amortisation and impairment (114) (22) (136) Opening net book balance 248 9 257 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – other 100 4 104 Total additions 100 4 104 Other m ovem ents Depreciation/amortisation expense (64) (9) (73) As at 30 June 2012 Gross book value 462 35 497 Accumulated depreciation/amortisation and impairment (178) (31) (209) Closing net book balance 284 4 288 Prepared on Australian Accounting Standards basis.

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WINE AUSTRALIA CORPORATION

Section 1: Agency overview and resources 199 1.1 Strategic direction statement 199 1.2 Agency resource statement 201 1.3 Budget measures 201 Section 2: Outcomes and planned performance 202 2.1 Outcomes and performance information 202 Section 3: Explanatory tables and budgeted financial statements 206 3.1 Explanatory tables 206 3.2 Budgeted financial statements 207

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Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

The Australian wine sector continues to experience difficult trading conditions. Key issues facing our industry include:

 A declining image for Australian wine - in established markets, Australian sales are concentrated at entry level price points - our category isn’t widely viewed as exciting or inspirational  Impacts of global wine industry pressures - global over supply of wine and improved competitiveness of other wine producing countries - increasing retail consolidation in core markets - prevalence and rate of growth of buyers own brands and other opportunistic brands  Macro economic pressures - the ongoing effects of the global financial crisis, particularly in our two largest export markets, the United States of America (USA) and the United Kingdom (UK) - impact on competitiveness of a strong and rising Australian dollar - high costs of production in Australia compared to the competitive set. These issues are impeding our ability to grow sales at higher price points. They are eroding margins/profitability, are resulting in a reduction in our representation and diversity of offer and constraining our category growth against other wine producing countries and other beverages. In conjunction with the Winemakers’ Federation of Australia and Wine Grape Growers’ Australia, Wine Australia has contributed to the Wine Restructuring Action Agenda (WRAA) to assist industry to address the fundamental supply/demand imbalance. Through the WRAA process, businesses in all major wine regions have been encouraged to strategically address the oversupply issue with a minimum of 20 per cent of the total national vineyard area being surplus to requirements. Despite clear market signals, however, adjustment is not proceeding at a sufficient pace with a combination of unrealistic expectations, non-commercial motives and short-term opportunism continuing to motivate many operators to resist change. With the WRAA partners, a range of initiatives are being undertaken to maintain the momentum in pursuing the changes necessary to resolve the supply/demand imbalance.

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Globally, Wine Australia is executing a marketing strategy to recapture the excitement about the Australian category and evolve our positioning towards a stronger perception and recognition of quality, diversity (style, region, place, story) and value in our wines. The brand of our strategy, A+ Australian Wine is a strong signal of evolution that invites a new way to look at Australian wine. It is disruptive, challenging assumptions and changing expectations about the category; it is energetic and confident and it communicates that there is more to discover about Australian wine. Together with our partners, including Tourism Australia and Austrade, we are implementing programs and activities that re-establish confidence and excitement around the category in established markets; energetically develop our positioning in new and emerging markets; and promote Australian wine in the domestic market to address the loss of share to imports and other alcoholic beverages. The strategic promotion of Australian wine will focus on education – building confidence and insights through targeted trade education and ensuring Australia is a cornerstone category in consumers wine knowledge. We will also raise awareness of quality and diversity through targeted investment in the international visits program. Wine Australia’s strategy is to educate, engage and energise, promoting Australia’s best wines as second to none and promoting the quality, reliability, value and stories of the wider Australian branded category. Through the knowledge development service, Wine Australia is ensuring that foundation data and key market insights are provided to the industry in succinct, targeted, snapshot communications that are easily accessible through our website which is being redeveloped. The challenge ahead is to increase industry awareness about the information available to Australian producers to assist them with their decision making and planning and to compete more effectively in key markets. Wine Australia’s compliance service is implementing enhancements that ensure that the international reputation for Australian wine continues to be protected whilst addressing risks that have become evident as a consequence of increased bulk wine exports. Wine Australia will also continue to work with other Australian Government agencies to address market access barriers and reduce tariff and technical trade barriers to facilitate trade of Australian wine in international markets. While facing many and varied challenges, Wine Australia are confident that the resolute character of the Australian wine industry will foster a turnaround. We are already moving down the path towards a more sustainable platform with a more widespread appreciation and acknowledgement of quality, diversity and value of Australian wines. Continued successful implementation of this strategy will see the industry bounce back strongly both domestically and internationally and improve the competitiveness and financially sustainability of Australia’s 2400 wineries which are supported by over 7000 Australian grape growers.

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1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: Wine Australia Corporation resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Proposed Total Actual of prior at Budget estim ate available year am ounts appropriation available in 2011–12 2011–12 2011–12 2010–11 Source $'000 $'000 $'000 $'000 Opening balance/Reserves at bank 3,165 3,165 4,569 REVENUE FROM GOVERNMENT Special appropriations Wine Australia Corporation Act 1980, - 4,936 4,936 5,307 Total special appropriations 1 - 4,936 4,936 5,307 Total funds from governm e nt - 4,936 4,936 5,307 FUNDS FROM INDUSTRY SOURCES Levies2 - 4,936 4,936 5,307 less amounts paid to the CRF - (4,936) (4,936) (5,307) User pay promotions - 282 282 383 Program memberships - 1,381 1,381 1,391 Sales of goods and services - 3,514 3,514 4,237 Licence fees - 752 752 752 Total - 5,929 5,929 6,763 FUNDS FROM OTHER SOURCES Interest - 140 140 174 Sale of goods and services - 490 490 547 Other - 285 285 285 Total - 915 915 1,006 Total net resourcing for agency 3,165 11,780 14,945 17,645 1 Wine Australia is not directly appropriated as it is a CAC Act body. 2 Levies imposed by the Primary Industries (Excise) Levies Act 1999 and the Primary Industries (Customs) Act 1999 are collected by the Department of Agriculture, Fisheries and Forestry (DAFF) and are paid to Wine Australia under the Wine Australia Corporation Act 1980.

All figures are GST exclusive CRF – Consolidated Revenue Fund

1.3 BUDGET MEASURES

Wine Australia is not affected by any 2011–12 budget measures.

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Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of Wine Australia Corporation in achieving government outcomes.

Outcome 1: Enhancement of the operating environment of the Australian wine industry through providing the leading role in; market development, knowledge development, compliance and trade. Outcome 1 Strategy Wine Australia’s objective is to build a more profitable wine industry by extending Australia’s fine wine presence and reputation globally, and by providing foundation data and market insights to Australian producers that deliver a competitive advantage. Wine Australia provides strategic support to the Australian wine sector by delivering the following services designed to increase and sustain the demand for Australian wine. Market Development – Growing the Markets Through its offices in Australia, the UK, Ireland, China, Hong Kong, Japan, the USA and Canada, Wine Australia works in collaboration with Australian wine exporters and local importers to develop and expand the global market for Australian wine. Knowledge Development – Better Decision Making Wine Australia produces a range of analytical tools and maintains an extensive database of wine sector information that is readily available to help stakeholders make effective decisions. Compliance – Maintaining the Reputation To preserve Australian wine’s international reputation for quality and integrity, Wine Australia licenses exporters, issues permits for Australian wine and brandy exports, runs a label integrity program to prevent false and misleading labelling and, through the geographical Indications Committee, defines the wine grape producing regions of Australia. Trade – Better market Access

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Wine Australia works to increase Australian wine exports by assisting the sector with market access issues. Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1, by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: Enhancem ent of the operating environm ent of 2010–11 2011–12 the Australian w ine industry through providing the Estimated Estimated role in; m arket developm ent, know ledge developm ent, actual expenses com pliance and trade. expenses $'000 $'000 Program 1.1: Wine Australia Corporation Revenue from government Special appropriations 5,307 4,936 Revenues from industry sources 7,767 6,930 Revenues from other independent sources 1,006 915 Total for Program 1.1 14,080 12,781 Outcom e 1 Totals by resource type Revenue from government Special appropriations 5,307 4,936 Revenues from industry sources 7,767 6,930 Revenues from other independent sources 1,006 915 Total expe nses for Outcom e 1 14,080 12,781

2010–11 2011–12 Average Staffing Level (num ber) 44 42

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Contributions to Outcome 1

Program 1.1: Wine Australia Corporation

Program objective Build a more profitable wine industry by extending Australia’s fine wine presence and reputation globally, and by providing foundation data and market insights to Australian producers that deliver a competitive advantage.

Program expenses Surplus cash holdings generated in recent years are being utilised in 2010–11 through to 2012–13 to build a more profitable wine industry through the development and implementation of initiatives identified in the strategic direction statement. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual departmental expenses: Wine Australia Corporation 14,080 12,781 12,305 11,681 11,631 Total program expens es 14,080 12,781 12,305 11,681 11,631

Program 1.1 Deliverables  Market development – category positioning of Australia to develop awareness of our regions and the diversity of our fine wine offer, extending our presence and reputation globally.  Knowledge development – support the Australian wine sector’s competitiveness through the collection, presentation and dissemination of the global wine sector intelligence.  Compliance – preservation of Australia’s international reputation for quality and integrity.  Trade – facilitating an increase in Australian wine exports by addressing market access barriers.

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Program 1.1 Key Performance Indicators 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Increase in the percentage - 2% 3% 4% 4% of bottled w ine > current moving annual total average per litre of Increase market share for - 1% 1% 1% 1% Australian w ine in the Australian domestic market, measured by w holesale sales data. Increased use of information - 5% 5% 5% 5% products and services. Absence of any adverse incidents - 0% 0% 0% 0% affecting the international reputation of Australian w ine.

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Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years Wine Australia does not have any administered funds.

3.1.2 Special accounts Wine Australia does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because Wine Australia has no indigenous specific expenses.

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3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Differences in agency resourcing and financial statements There are no differences between the agency resourcing and financial statements.

3.2.2 Analysis of budgeted financial statements The 2011–12 budget and forward estimates are based on operating deficits of $1.0 million in 2011–12 and $0.5 million in 2012–13 and break-even results over the remainder of the forward estimates. The additional expenditure is to assist industry to meet the challenges identified in the Strategic Directions Statement and to help build a more profitable Australian wine industry. This budget has been prepared to ensure Wine Australia has sufficient financial resources to enable it to perform its functions and exercise its powers for the purpose of achieving the objectives specified in the Wine Australia Corporation Act 1980.

Total anticipated revenue for 2011–12 is $11.781 million. This is a 10 per cent reduction on the previous year

Forty-two per cent of this revenue comes from levies on grape products used in the manufacture of wine (Wine Grape Levy) and on the value of wine exported (Wine Export Charge). Revenue from these levies, which are collected by the Levies Revenue Service of DAFF, is expected to decrease $371 000 from the 2009–10 year because of an anticipated decline in the size of the 2011 vintage to 1.4 million tonnes and with the value of Australian wine exports expected to remain $2.0 billion.

Other major sources of revenue are regulatory fees, program memberships, promotional user-pay events, Export partnership sponsorships and Australian Wine Overseas (AWO) scheme sales. In 2011–12, revenue from these sources is anticipated to decrease by $928 000 on the 2010–11 year. The calculation of revenue from these sources is based upon export projections for regulatory fees, promotional program activity for program memberships and promotional user-pay events, and sales projections for the AWO scheme. A significant portion of this decrease in own-source income is a reduction in export approval fees in January 2011.

Wine Australia expects to receive $150 000 from the Export Market Development Grant in 2011–12. This is in line with funds received in recent years from this source.

Total expenditure is estimated to be $12.781 million, a 9.2 per cent decrease on the previous year.

Employee related expenditure accounts for approximately 33 per cent of all expenditure and has decreased by $163 000 on the 2010–11 year. The decrease is due largely to the annualised impact of staff changes effected during 2010–11 and further reductions expected in 2011–12.

197 WAC Budget Statements

Supplier related expenditure relates to promotional activities, operating costs, accommodation, information technology and other fees and charges. Supplier related expenditure is expected to decrease by $0.979 million on the 2010–11 year. The decreases reflects a reassessment of promotional activities based on available funding, with a view to addressing the issues identified in the Strategic Directions Statement

Promotional expenditure represents 38 per cent of all supplier related expenditure and is directly related to the amount of promotional revenue received.

Capital expenditure is funded internally and levels of expenditure are determined following reviews of Wine Australia’s infrastructure requirements.

198 WAC Budget Statements

3.2.3 Budgeted financial statements tables Table 3.2.1 Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 4,423 4,260 4,227 4,073 4,190 Supplier expenses 9,280 8,301 7,836 7,378 7,221 Depreciation and amortisation 299 220 242 230 220 Losses from asset sales 1 - - - - Foreign exchange losses 77 - - - - Total expenses 14,080 12,781 12,305 11,681 11,631 LESS: OWN-SOURCE INCOME Ow n-source revenue Sale of goods and rendering of 5,041 4,542 4,444 4,318 4,238 Industry contributions 2,123 1,734 1,703 1,735 1,765 Interest 174 140 110 80 80 Rental income 70 64 64 64 64 Other 365 365 365 365 365 Total ow n-source revenue 7,773 6,845 6,686 6,562 6,512 Total ow n-source incom e 7,773 6,845 6,686 6,562 6,512 Net cost of (contribution by) services 6,307 5,936 5,619 5,119 5,119 Revenue from government 5,307 4,936 5,119 5,119 5,119 Surplus (Deficit) (1,000) (1,000) (500) - - Surplus (Deficit) attributable to the Australian Governm ent (1,000) (1,000) (500) - - Prepared on Australian Accounting Standards basis.

199 WAC Budget Statements

Provisions Employee provisions 648 668 687 707 725 Other 18 - - - - Total provisions 666 668 687 707 725 Total liabilities 2,266 2,268 2,287 2,307 2,325 Net assets 3,099 2,099 1,599 1,599 1,599 EQUITY* Reserves 210 210 210 210 210 Retained surplus 2,889 1,889 1,389 1,389 1,389 Total Equity 3,099 2,099 1,599 1,599 1,599 * 'Equity' is the residual interest in assets after deduction of liabilities.

Prepared on Australian Accounting Standards basis.

200 WAC Budget Statements

Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Goods and services 5,536 4,756 4,658 4,532 4,452 Interest 174 140 110 80 80 Other 7,366 6,884 7,037 7,069 7,099 Total ca sh received 13,076 11,780 11,805 11,681 11,631 Cash us ed Employees 4,347 4,240 4,208 4,054 4,172 Suppliers 9,147 7,973 7,486 7,022 6,866 Net GST paid 340 345 350 355 355 Total ca sh used 13,834 12,558 12,044 11,431 11,393 Net cash from (used by) operating activities (758) (778) (239) 250 238 INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment 1 - - - - Total ca sh received 1 - - - - Cash us ed Purchase of property, plant and equipment 647 125 125 125 125 Total ca sh used 647 125 125 125 125 Net cash from (used by) investing activities (646) (125) (125) (125) (125) Net increase (de crease) in cash held (1,404) (903) (364) 125 113 Cash and cash equivalents at the beginning of reporting period 4,569 3,165 2,262 1,898 2,023 Cash and cash equivalents at the end of the reporting period 3,165 2,262 1,898 2,023 2,136 Prepared on Australian Accounting Standards basis.

201 WAC Budget Statements

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Total earnings revaluation equity reserve $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 2,889 210 3,099 Adjusted opening balance 2,889 210 3,099 Com prehensive incom e Surplus (deficit) for the period (1,000) - (1,000) Total comprehensive income (1,000) - (1,000) Estim ated closing balance as at 30 June 2012 1,889 210 2,099 Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources 647 125 125 125 125 TOTAL 647 125 125 125 125 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 647 125 125 125 125 Total cash used to acquire assets 647 125 125 125 125 Prepared on Australian Accounting Standards basis.

202 WAC Budget Statements

Table 3.2.6: Statement of asset movements (2011–12) Buildings Other property, Intangibles Total plant and equipment $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 90 1,038 1,309 2,437 Accumulated depreciation/amortisation and impairment (90) (187) (1,140) (1,417) Opening net book balance - 851 169 1,020 CAPITAL ASSET ADDITIONS Estim ated e xpenditure on new or replacem ent assets By purchase – other - 125 - 125 Total additions - 125 - 125 Other m ovem ents Depreciation/amortisation expense - (194) (26) (220) As at 30 June 2012 Gross book value 90 1,163 1,309 2,562 Accumulated depreciation/amortisation and impairment (90) (381) (1,166) (1,637) Closing net book balance - 782 143 925 Prepared on Australian Accounting Standards basis.

3.2.4 Notes to the financial statements The financial statements have been prepared in accordance with:

 Finance Minister’s Orders for reporting periods on or after 1 July 2010

 Australian Accounting Standards and Interpretations issued by the Accounting Standards Board that apply for the reporting period.

The statement of comprehensive income, balance sheet, statement of change in equity and statement of cash flows have been prepared on an accrual basis and in accordance with historical cost convention, except for certain assets and liabilities which are at fair value. Except, where stated, no allowance is made for the effect of changing prices on the results or the financial position.

203

AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY

Section 1: Agency overview and resources 217 1.1 Strategic direction statement 217 1.2 Agency resource statement 219 1.3 Budget measures 220 Section 2: Outcomes and planned performance 221 2.1 Outcomes and performance information 221 Section 3: Explanatory tables and budgeted financial statements 226 3.1 Explanatory tables 226 3.2 Budgeted financial statements 228

215

AUSTRALIAN FISHERIES MANAGEMENT AUTHORITY

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

The Australian Fisheries Management Authority (AFMA) was established under the Fisheries Administration Act 1991 to manage the resources of Australia’s Commonwealth fisheries on behalf of the Australian community using the provisions of the Fisheries Management Act 1991.

The AFMA Commission is responsible for exercising AFMA’s domestic fisheries management functions and powers. The Chief Executive Officer is responsible for assisting the Commission, including giving effect to its decisions, and for exercising AFMA’s foreign compliance functions and powers. The Chief Executive Officer is also a Commissioner.

AFMA’s legislated functions and objectives provide for the implementation of efficient and cost effective fisheries management consistent with the principles of ecologically sustainable development, including the precautionary principle, and maximising the net economic returns for the Australian community from the management of Australian fisheries. AFMA is to have regard to the impact of fishing on non-target species and the long-term sustainability of the marine environment.

In support of the objectives, AFMA’s work concentrates on providing fisheries management arrangements, compliance programs, licensing services and developing operational policies and regulations based on understanding and monitoring Australian marine living resources affected by Commonwealth fisheries.

AFMA also provides fisheries management services for the Protected Zone Joint Authority under the Torres Strait Fisheries Act 1984.

AFMA undertakes its foreign compliance functions through participation in the Australian Government’s civil maritime surveillance and response program and outreach activities providing advice and training in neighbouring countries. AFMA’s role includes fisheries enforcement, planning, training and vessel disposal activities. The activities protect Commonwealth and State-managed fisheries from illegal foreign fishing and contribute to managing wider border security issues including biosecurity.

When developing and implementing fisheries management arrangements, AFMA works in partnership with stakeholders, including commercial fishing operators, Indigenous interests, the prescribed peak industry body and sectoral associations, recreational/charter fishing representatives, researchers, environment/conservation

217 AFMA Budget Statements organisations and others who have an interest in how Australia’s Commonwealth fisheries are managed. AFMA engages with stakeholder groups through management advisory committees, liaison officers, port visits, newsletters and direct mail to concession holders in Commonwealth fisheries. These partnership arrangements are especially important as AFMA continues to pursue greater co-management of fisheries by encouraging AFMA’s stakeholders to assume more responsibility for managing fisheries to ensure their ecological sustainability.

In managing Commonwealth fisheries, AFMA applies the Australian Government cost recovery policy. The commercial fishing industry pays for costs directly attributed to and recoverable from the fishing industry while the Government pays for foreign compliance and activities that benefit the broader community.

AFMA continues to implement the December 2005 direction of the then Minister for Fisheries, Forestry and Conservation made under section 91 of the Fisheries Administration Act 1991 to take actions to improve the biological and economic status of Commonwealth fisheries. These policy requirements were reflected in AFMA’s subsequent fisheries management decisions and actions. To fulfil these and other functions AFMA commissions, and places a high importance on, scientific and economic research to inform its decision making processes.

AFMA’s focus over the current and forecast period is on:

 refining management arrangements consistent with the Commonwealth Fisheries Harvest Strategy Policy and Guidelines that facilitate sustainable and profitable fisheries

 commissioning fisheries research based on balancing catch and cost against ecological risk, and using ecological risk assessment and ecological risk management to meet AFMA’s responsibilities for environmentally sustainable fisheries and prevent unacceptable impacts of Commonwealth fisheries on marine ecosystems and organisms

 providing incentives to optimise compliance through simplified regulation of the commercial fishing industry, effective licensing services and promoting direct industry involvement in managing their fisheries

 deterring illegal foreign fishing in the Australian Fishing Zone by providing the fisheries focus in the Australian Government border protection arrangements, prosecuting offences and disposing of forfeited boats, gear and catches

 deterring illegal fishing in Commonwealth fisheries through targeted enforcement based on compliance risk assessments.

218 APVMA Budget Statements

1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: Australian Fisheries Management Authority resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriatio available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 Ordinary annual services 1 Departm ental appropriation Departmental appropriation2 - 22,985 22,985 23,228 s. 31 Relevant agency receipts3 - 1,155 1,155 1,813 Total - 24,140 24,140 25,041 Adm inistered expenses Outcome 1 - 5,693 5,693 4,100 Total - 5,693 5,693 4,100 Total ordinary annual services A - 29,833 29,833 29,141

Special accounts Opening balance4 15,226 - 15,226 15,756 Appropriation receipts5 - 24,140 24,140 25,041 Appropriation receipts – crediting right6 - 13,168 13,168 13,114 Non-appropriation receipts to special accounts - 1,871 1,871 1,517 Total special accounts B 15,226 39,179 54,405 55,428 Total resourcing (A+B) 15,226 69,012 84,238 84,569 Less appropriations draw n from annual or special appropriations above and credited to special accounts and/or CAC Act bodies through annual appropriations - (24,140) (24,140) (25,041) Total net resourcing for AFMA 15,226 44,872 60,098 59,528 1 Appropriation Bill (No.1) 2011–12 2 Includes an amount of $0.458million in 2011–12 for the Departmental Capital Budget (refer to table 3.2.5 for further details). For accounting purposes this amount has been designated as 'contributions by owners'. Actual available appropriation 2010-11 includes $0.270 million transferred from DAFF under s. 32. 3 s. 31 Relevant agency receipts – estimate. 4 Estimated opening balance for special accounts. For further information on special accounts see Table 3.1.2. 5 Appropriation receipts from annual appropriations for 2011–12 included above. 6 Crediting right for applicable levy and licence fee receipts banked to the CRF in accordance with s. 94C of the Fisheries Administration Act 1991.

All figures are GST exclusive. CRF – Consolidated Revenue Fund

219 AFMA Budget Statements

1.3 BUDGET MEASURES

Budget measures relating to AFMA are detailed in Budget Paper No. 2 and are summarised below.

Table 1.2: Australian Fisheries Management Authority 2011–12 Budget measures Program 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Expense m easures National Security – reduced costs in responding to illegal foreign fishing in northern w aters 1.1 Administered expenses (1,000) (1,000) (1,000) (1,000) - Departmental expenses - (1,092) (1,092) (1,092) - Total (1,000) (2,092) (2,092) (2,092) - Efficiency dividend – temporary increase in the rate1 1.1 Departmental expenses - (114) (230) (303) (333) Total - (114) (230) (303) (333) Total expe nse m easures Administered (1,000) (1,000) (1,000) (1,000) - Departmental - (1,206) (1,322) (1,395) (333) Total (1,000) (2,206) (2,322) (2,395) (333) Capital m easures Efficiency dividend – temporary increase in the rate1 1.1 Departmental capital - (2) (2) (2) (9) Total - (2) (2) (2) (9) Total capital m easures Departmental - (2) (2) (2) (9) Total - (2) (2) (2) (9) 1 The lead agency for the ‘Efficiency dividend – temporary increase in the rate’ is the Department of Finance and Deregulation. The full measure description appears in Budget Paper No.2 under the Cross Portfolio section.

Prepared on a Government Finance Statistics (fiscal) basis

220 APVMA Budget Statements

Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of AFMA in achieving government outcomes.

Outcome 1: Ecologically sustainable and economically efficient Commonwealth fisheries, through understanding and monitoring Australia’s marine living resources and regulating and monitoring commercial fishing, including domestic licensing and deterrence of illegal foreign fishing.

221 AFMA Budget Statements

Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1, by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: Ecologically sustainable and econom ically 2010–11 2011–12 efficient Com m onw ealth fishe ries, through understanding Estimated Estimated and m onitoring Australia's m arine living resources and actual expenses regulating and m onitoring com m ercial fishing, including expenses dom estic licensing and deterrence of illegal foreign fishing. $'000 $'000 Program 1.1: Australian Fisheries Managem ent Authority Administered expenses Ordinary annual services (Appropriation Bill No. 1) 4,100 5,693 Departmental expenses Departmental appropriation1 26,377 23,682 Special accounts 13,114 13,168 Expenses not requiring appropriation in the budget year2 494 740 Total for Program 1.1 44,085 43,283 Outcom e 1 Totals by appropriation type Administered expenses Ordinary annual services (Appropriation Bill No. 1) 4,100 5,693 Departmental expenses Departmental appropriation1 26,377 23,682 Special accounts 13,114 13,168 Expenses not requiring appropriation in the budget year2 494 740 Total expe nses for Outcom e 1 44,085 43,283

2010–11 2011–12 Estimated Estimated actual Budget Average Staffing Level (num ber) 3 213 198 1 Departmental appropriation combines "Ordinary annual services (Appropriation Bill No. 1)", "Revenue from independent sources (s. 31)" and "Departmental Capital Budget (Appropriation Bill 1)". 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense and amortisation expense for both departmental and administered items. 3 The Average Staffing Level for 2010–11 differs from the 2010–11 PBS due to a transfer of three positions from DAFF under s. 32 determinations at the 2010–11 Additional Estimates. Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change.

222 APVMA Budget Statements

Contributions to Outcome 1

Program 1.1: Australian Fisheries Management Authority

Program objective •1 To sustainably manage Commonwealth fisheries and deter illegal fishing in the Australian Fishing Zone.

•2 Linked to: •3 Australian Government Civil Maritime Surveillance and Response Program (Customs and Border Security Program 1.4).

Program expenses  AFMA’s expenditure on domestic fisheries management represents a combination of cost recovered and government funded activities. This expenditure, including the departmental appropriation, is managed through the AFMA Special Account. Special account expenditure is expected to reduce between 2010–11 and 2011–12 due to the completion of a range of business improvement and information technology projects being funded from prior year surpluses.  Administered expenditure for the caretaking and disposal of illegal foreign fishing vessels in 2011–12 includes the costs of construction of vessel disposal facilities at Gove. Expenses not requiring appropriation represent the depreciation of disposal facilities (administered assets). 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Annual administered expenses: Ordinary Annual Services (Appropriation Bill No. 1) 4,100 5,693 4,066 4,158 5,303 Special account expenses: AFMA Special Account 13,114 13,168 13,563 13,970 14,389 Annual departmental expenses: Ordinary Annual Services (Appropriation Bill No. 1)1 26,377 23,682 23,737 24,959 22,904 Expenses not requiring appropriation in the budget year2 494 740 727 727 727 Total program expenses 44,085 43,283 42,093 43,814 43,323 1 Departmental appropriation combines "Ordinary annual services (Appropriation Bill No. 1)" and "Revenue from independent sources (s31)" and "Departmental Capital Budget (Appropriation Bill 1)". 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense and amortisation expense for both departmental and administered items.

223 AFMA Budget Statements

Program 1.1 Deliverables AFMA aims to better understand and monitor Australia’s marine living resources relevant to AFMA managed fisheries for the long term sustainability of target and non-target species through:  ecological risk assessment of Commonwealth commercial fishing  identifying management responses to fishing impacts for species assessed as being at high risk from fishing. AFMA pursues ecological sustainability and maximising the net economic returns to the Australian community from fisheries management by:  applying the Commonwealth Harvest Strategy Policy which defines targets for pursuing precautionary, economically efficient catch levels  conducting risk based compliance enforcement to deter illegal fishing in AFMA managed fisheries. AFMA aims to deter illegal fishing (domestic and foreign) in the Australian Fishing Zone and thereby minimise its impact on Australian fisheries resources by:  providing the fisheries focus within the Australian Government Civil Maritime Surveillance and Response Program  completing an annual compliance risk assessment and identifying risk treatment and/or intervention programs for domestic fisheries. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Completed research projects 12 Minimum of Minimum of Minimum of Minimum of including Torres Strait Fisheries.1 10. 10. 10. 10. Completed fishery independent 8 10 9 10 10 surveys. Regulate fisheries including Torres 11 12 12 13 13 Strait Fisheries under plans of management. Apply harvest strategies.2 13 11 11 11 11 Complete licensing transactions a) manual 1912 2376 1805 1500 866 b) automated 1239 1333 1600 1919 2764 Collect levies. Greater Greater Greater Greater Greater than 99% than 99% than 99% than 99% than 99% Prosecute illegal foreign fishers. 193 Note3 Note3 Note3 Note3 Dispose of illegal foreign fishing 36 Note3 Note3 Note3 Note3 vessels. Illegal foreign fishing vessel caretaking and disposal Number of disposal facilities - 1 - - - constructed.4 Forfeited vessels disposed of.5 100% 100% 100% 100% 100% Completion of annual domestic risk 100% 100% 100% 100% 100% assessment. 1 Includes only research projects that AFMA administers contracts with the research provider. It does not include research projects administered by other agencies for which AFMA co-invests.

224 APVMA Budget Statements

2 The reduction in 2010–11 reflects consolidation of four harvest strategies into one and one additional harvest strategy coming into effect. 3 Performance cannot be forecast reliably. Actual results will be included in the AFMA annual report. 4 Proposed construction re-phased from 2010–11 to 2011–12. 5 Expressed as a proportion of forfeited vessels brought to AFMA commissioned caretaking and disposal facilities. The actual numbers depend on the number apprehended and brought to the disposal facilities through the Civil Maritime Surveillance and Response Program (Customs and Border Security Program 1.4), and cannot be forecast reliably.

Program 1.1 Key Performance Indicators The Commonwealth Harvest Strategy Policy and associated Guidelines provide a framework to maintain key commercial fishery stocks at ecologically sustainable levels and maximise net economic returns through fisheries management and applying a precautionary approach.  AFMA and the Australian Bureau of Agricultural and Resource Economics and Sciences (previously known as the Bureau of Rural Sciences and the Australian Bureau of Agricultural and Resource Economics) are reviewing and testing harvest strategies to assess their effectiveness at meeting the objectives of the Commonwealth Harvest Strategy Policy over 2009–2012. Progress will be reported in AFMA’s annual reports. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 For economically significant stocks1 a) Maximise the number of key 18 18 21 22 24 commercial stocks w ith harvest strategy targets based on maximum economic yield or the best available proxy.2 b) Improve the number of stocks 11 11 15 16 17 in (a) assessed as being on c) For those stocks in (a) that 7 7 6 6 6 are assessed as not on target, improve the number that are heading tow ards their target Minimise the number of fish stocks 1 0 0 0 0 subject to overfishing.3 Minimise the number of species 73 90 95 93 92 assessed as remaining at high risk after mitigation.4 Maximise the disposal of 100% 100% 100% 100% 100% apprehended foreign illegal, unregulated and unreported (IUU) vessels and suspected illegal entry vessels (SIEVs). 1 The top 32 fish stocks contributing to the gross value of production of Commonwealth fisheries. 2 Where higher and lower value species are caught together, different targets for the lower value species may maximise net economic returns over all. 3 In AFMA managed fisheries, not including jointly and internationally managed fisheries. 4 Ecological Risk Assessments for 30 Commonwealth managed fisheries and sub-fisheries have been completed covering 1184 species. The number of species estimated at high risk has decreased from that reported in 2009–10 due to the completion of higher level assessments and the application of residual risk guidelines. All species identified as being at high risk are the subject of mitigation measures. Further assessments are scheduled during the reporting period which may identify additional high risk species – because of the use of more precautionary reference points for shark species. Later assessments should reflect the outcome of mitigation measures.

225 AFMA Budget Statements

Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years Administered funds can be provided for a specified period, for example under annual Appropriation Acts. Funds not used in the specified period with the agreement of the Minister for Finance and Deregulation may be moved to a future year. Table 3.1.1 shows the movement of administered funds approved between years.

Table 3.1.1: Movement of administered funds between years1 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Outcome 1: Illegal foreign fishing vessel caretaking and disposal (1,800) 1,800 - - - Total m ovem ent of adm inistered funds (1,800) 1,800 - - - 1 Figures displayed as a negative represent a decrease in funds and a positive reflect an increase in funds.

226 APVMA Budget Statements

3.1.2 Special accounts Special accounts provide a means to set aside and record amounts used for specified purposes. Special accounts can be created by a Finance Minister’s Determination under the FMA Act or under separate enabling legislation. Table 3.1.2 shows the expected additions (receipts) and reductions (payments) for each account used by AFMA.

Table 3.1.2: Estimates of special account flows and balances Opening Closing balance Receipts Payments Adjustments balance 2011–12 2011–12 2011–12 2011–12 2011–12 2010–11 2010–11 2010–11 2010–11 2010–11 Outcome $'000 $'000 $'000 $'000 $'000 AFMA Special Account (D) 1 15,226 39,303 38,468 - 16,061 15,756 37,875 38,405 - 15,226 AFMA Services for Other Entities and Trust Monies Special - - - - - Account (A) 1 - - - - - Total special accounts 2011–12 Budget estim ate 15,226 39,303 38,468 - 16,061 Total special accounts 2010–11 estimated actual 15,756 37,875 38,405 - 15,226 (A) = Administered (D) = Departmental The AFMA special account was established as at 1 July 2008 under s. 94B of the Fisheries Administration Act 1991. The Act also includes a crediting right provision to provide an equivalent amount to AFMA for its management levies and license fees that are banked to consolidated revenue. The AFMA Services for Other Entities and Trust Monies special account is an FMA Act section 20 special account established by Financial Management and Accountability Determination 2008/12.

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because AFMA has no indigenous specific expenses.

227 AFMA Budget Statements

3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Analysis of budgeted financial statements AFMA’s departmental expenditure will reduce by $2.4 million between 2010–11 and 2011–12. After 2011–12, expenditure is expected to remain relatively stable.

Funding for depreciation and amortisation expenses have been attributed between government and cost recovered activities in accordance with AFMA’s Cost Recovery Impact Statement. The cost recovered proportion, which includes amortisation of internally developed licensing systems, will continue to be recovered via cost recovery arrangements. The government component will no longer be appropriated and has been reflected as an operating loss in each financial year.

The departmental capital budget at Table 3.2.5 provides an appropriation of $0.458 million in 2011–12 for the replacement of computer and other office equipment. The balance of asset acquisitions are to be funded from own sourced income and are consistent with the approved Capital Management Plan.

Administered income reflects the collection of levies and license fees that are banked to consolidated revenue. The receipts comprise two components:

• The AFMA Management component which is available to be credited to the AFMA Special Account (as departmental revenue) in accordance with section 94C of the Fisheries Administration Act 1991.

• The ‘research component’ which is collected on behalf of the Fisheries Research and Development Corporation.

Administered expenditure reflects payments to the providers of illegal foreign fishing vessel caretaking and disposal services. The expenditure estimate in 2011–12 includes $1.8 million for the construction of disposal facilities at Gove.

228 APVMA Budget Statements

3.2.2. Budgeted financial statements tables Table 3.2.1 Comprehensive income statement (showing net cost of services) (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 EXPENSES Employee benefits 22,502 20,729 21,207 22,284 21,374 Supplier expenses 16,055 15,404 15,327 15,901 15,175 Depreciation and amortisation 1,365 1,394 1,430 1,408 1,408 Total expenses 39,922 37,527 37,964 39,593 37,957 LESS: OWN-SOURCE INCOME Ow n-source revenue Sale of goods and rendering of services 1,813 1,155 1,155 1,155 1,155 Levies and license fees provided via crediting right to special account 13,114 13,168 13,563 13,970 14,389 Total ow n-source revenue 14,927 14,323 14,718 15,125 15,544 Net cost of (contribution by) services 24,995 23,204 23,246 24,468 22,413

Revenue from government 23,028 22,527* 22,582* 23,804* 21,749* Surplus (Deficit) attributable to the Australian Governm ent (1,967) (677) (664) (664) (664) OTHER COMPREHENSIVE INCOME Changes in asset revaluation reserves Total other com prehensive incom e - - - - - Total com prehensive incom e (1,967) (677) (664) (664) (664) Total com prehensive incom e attributable to the Australian Governm ent (1,967) (677) (664) (664) (664)

Note: Reconciliation of com prehensive incom e attributable to the agency 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Total com prehensive incom e (loss) attributable to the Australian Governm ent (1,967) (677) (664) (664) (664) plus non-appropriated expenses depreciation and amortisation expenses 431 677 664 664 664 Total com prehensive incom e (loss) attributable to the agency (1,536) - - - - Prepared on Australian Accounting Standards basis.

229 AFMA Budget Statements

Table 3.2.2: Budgeted departmental balance sheet (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents 376 383 389 411 360 Trade and other receivables 15,449 15,500 16,040 16,593 17,342 Total financial assets 15,825 15,883 16,429 17,004 17,702 Non-financial assets Land and buildings 5,705 5,219 4,733 4,247 3,761 Property, plant and equipment 1,320 1,579 1,490 1,497 1,753 Intangibles 3,256 2,863 2,496 2,102 1,626 Other 200 209 208 215 201 Total non-financial assets 10,481 9,870 8,927 8,061 7,341 Total assets 26,306 25,753 25,356 25,065 25,043 LIABILITIES Payables Suppliers 4,921 5,032 5,019 5,019 5,209 Total payables 4,921 5,032 5,019 5,019 5,209 Provisions Employee provisions 4,096 3,651 3,737 3,918 3,775 Total provisions 4,096 3,651 3,737 3,918 3,775 Total liabilities 9,017 8,683 8,756 8,937 8,984 Net assets 17,289 17,070 16,600 16,128 16,059 EQUITY* Parent entity interest Contributed equity 9,416 9,874 10,068 10,260 10,855 Reserves 3,854 3,854 3,854 3,854 3,854 Retained surplus (accumulated deficit) 4,019 3,342 2,678 2,014 1,350 Total equity 17,289 17,070 16,600 16,128 16,059 * 'Equity' is the residual interest in assets after deduction of liabilities.

Prepared on Australian Accounting Standards basis.

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Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Goods and services 2,226 1,387 1,155 1,139 1,155 Appropriations 23,028 22,772 22,582 23,804 21,614 Other 14,886 15,107 15,494 16,039 14,493 Total ca sh received 40,140 39,266 39,231 40,982 37,262 Cash us ed Employees 22,288 21,174 21,121 22,103 21,517 Suppliers 17,538 16,940 16,975 17,629 14,971 Other - 829 835 885 742 Total ca sh used 39,826 38,943 38,931 40,617 37,230 Net cash from (used by) operating activities 314 323 300 365 32 INVESTING ACTIVITIES Cash received - - - - - Total ca sh received - - - - - Cash us ed Purchase of property, plant and equipment 553 774 488 535 678 Total ca sh used 553 774 488 535 678 Net cash from (used by) investing activities (553) (774) (488) (535) (678) FINANCING ACTIVITIES Cash received Contributed equity 200 458 194 192 595 Total ca sh received 200 458 194 192 595 Cash us ed - - - - - Total ca sh used - - - - - Net cash from (used by) financing activities 200 458 194 192 595 Net increase (de crease) in cash held (39) 7 6 22 (51) Cash and cash equivalents at the beginning of the reporting period 415 376 383 389 411 Cash and cash equivalents at the end of the reporting period 376 383 389 411 360 Prepared on Australian Accounting Standards basis.

231 AFMA Budget Statements

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Contributed Total earnings revaluation equity/ equity reserve capital $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 4,019 3,854 9,416 17,289 Adjusted opening balance 4,019 3,854 9,416 17,289 Com prehensive incom e Surplus (deficit) for the period (677) - - (677) Total comprehensive income (677) - - (677) of w hich: Attributable to the Australian Government (677) - - (677) Transactions w ith ow ners Contributions by owners Departmental Capital Budget (DCBs) - - 458 458 Sub-total transactions with owners - - 458 458 Estim ated closing balance as at 30 June 2012 3,342 3,854 9,874 17,070 Closing balance attributable to the Australian Governm ent 3,342 3,854 9,874 17,070 Prepared on Australian Accounting Standards basis.

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Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 CAPITAL APPROPRIATIONS Capital budget – Bill 1 (DCB) 200 458 194 192 595 Total capital appropriations 200 458 194 192 595 Total new capital appropriations represented by: Purchase of non-financial assets 200 458 194 192 595 Total item s 200 458 194 192 595 PURCHASE OF NON-FINANCIAL ASSETS Funded by capital appropriation – DCB1 200 458 194 192 595 Funded internally from departmental resources2 353 316 294 343 83 TOTAL 553 774 488 535 678 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 553 774 488 535 678 Total cash used to acquire assets 553 774 488 535 678 1 Does not include annual finance lease costs. Include purchase from current and previous years Departmental Capital Budgets (DCBs). 2 Includes the following sources of funding: – annual and prior year appropriations – donations and contributions – gifts – internally developed assets – s. 31 relevant agency receipts – proceeds from the sale of assets

Prepared on Australian Accounting Standards basis.

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Table 3.2.6: Statement of asset movements – departmental (2011–12) Land Buildings Other property, Intangibles Total plant and equipment $'000 $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 229 6,025 2,307 4,911 13,472 Accumulated depreciation/amortisation and impairment - (549) (987) (1,655) (3,191) Opening net book balance 229 5,476 1,320 3,256 10,281 CAPITAL ASSET ADDITIONS Estim ated e xpenditure on new or replacem ent assets By purchase – appropriation annual services1 - - 652 122 774 Total additions - - 652 122 774 Other m ovem ents Depreciation/amortisation expense - (486) (393) (515) (1,394) As at 30 June 2012 Gross book value 229 6,025 2,959 5,033 14,246 Accumulated depreciation/amortisation and impairment - (1,035) (1,380) (2,170) (4,585) Closing net book balance 229 4,990 1,579 2,863 9,661 1 "Appropriation ordinary annual services" refers to funding provided through Appropriation Bill (No.1) 2011–12 for depreciation / amortisation expenses, DCBs or other operational expenses.

Prepared on Australian Accounting Standards basis.

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Table 3.2.7: Schedule of budgeted income and expenses administered on behalf of government (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 INCOME ADM INISTERED ON BEHALF OF GOVERNM ENT Revenue Non-taxation revenue Sale of goods and rendering of services1 14,014 14,068 14,463 14,870 15,289 Total non-taxation revenue 14,014 14,068 14,463 14,870 15,289 Total revenues adm inistered on behalf of governm ent 14,014 14,068 14,463 14,870 15,289 Total incom e adm inistered on behalf of governm ent 14,014 14,068 14,463 14,870 15,289 EXPENSES ADMINISTERED ON BEHALF OF GOVERNM ENT Supplier expenses 4,100 5,693 4,066 4,158 5,303 Depreciation and amortisation 63 63 63 63 63 Total expe nses adm inistered on behalf of governm ent 4,163 5,756 4,129 4,221 5,366 1 Includes an estimated $0.900 million per annum collected on behalf of FRDC which is not claimed by AFMA through the crediting right.

Prepared on Australian Accounting Standards basis.

Table 3.2.8: Schedule of budgeted assets and liabilities administered on behalf of Government (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS ADM INISTERED ON BEHALF OF GOVERNM ENT Financial assets Receivables 673 673 673 673 673 Total financial assets 673 673 673 673 673 Non-financial assets Land and buildings 534 471 408 345 282 Total non-financial assets 534 471 408 345 282 Total asse ts adm inistered on behalf of governm ent 1,207 1,144 1,081 1,018 955 LIABILITIES ADMINISTERED ON BEHALF OF GOVERNM ENT Payables Suppliers 358 358 358 358 358 Total payables 358 358 358 358 358 Total liabilities adm inistered on behalf of governm ent 358 358 358 358 358 Prepared on Australian Accounting Standards basis.

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Table 3.2.9: Schedule of budgeted administered cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Sales of goods and rendering of services1 14,013 14,068 14,463 14,870 15,289 Total cash received 14,013 14,068 14,463 14,870 15,289 Cash used Suppliers 4,100 5,693 4,066 4,158 5,303 Total cash used 4,100 5,693 4,066 4,158 5,303 Net cash from (used by) operating activities 9,913 8,375 10,397 10,712 9,986 Net increase (decrease) in cash held 9,913 8,375 10,397 10,712 9,986 Cash and cash equivalents at beginning of reporting period 1 - - - - Cash from Official Public Account for: – Appropriations 4,100 5,693 4,066 4,158 5,303 4,100 5,693 4,066 4,158 5,303 Cash to Official Public Account for: – Special accounts 14,014 14,068 14,463 14,870 15,289 Cash and cash equivalents at end of reporting period - - - - - 1 Includes FRDC levy component (see table 3.2.7).

Prepared on Australian Accounting Standards basis.

Table 3.2.10: Schedule of asset movements — administered (2011–12) Buildings Total $'000 $'000 As at 1 July 2011 Gross book value 699 699 Accumulated depreciation/amortisation and impairment (165) (165) Opening net book balance 534 534 Other m ovem ents Depreciation/amortisation expense (63) (63) As at 30 June 2012 Gross book value 699 699 Accumulated depreciation/amortisation and impairment (228) (228) Closing net book balance 471 471 Prepared on Australian Accounting Standards basis

236 AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY

Section 1: Agency overview and resources 239 1.1 Strategic direction statement 239 1.2 Agency resource statement 240 1.3 Budget measures 240 Section 2: Outcomes and planned performance 242 2.1 Outcomes and performance information 242 Section 3: Explanatory tables and budgeted financial statements 246 3.1 Explanatory tables 246 3.2 Budgeted financial statements 247

237 APVMA Budget Statements

AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

The Australian Pesticides and Veterinary Medicines Authority (APVMA) is established under the Agricultural and Veterinary Chemicals (Administration) Act 1992 (Administration Act). The APVMA’s principal responsibilities are described in the Administration Act and the Agricultural and Veterinary Chemicals Code Act 1994.

The APVMA is the independent Australian Government statutory authority responsible for registering pesticides and veterinary medicines and regulating them up to and including retail sale.

The APVMA is responsible for administering and managing the National Registration Scheme. The scheme sets out the regulatory framework for the management of pesticides and veterinary medicines in Australia. The APVMA carries out its work in partnership with state and territory governments and with the active involvement of other Australian Government agencies including the Department of Sustainability, Environment, Water, Population and Communities and the Office of Chemical Safety and Environment Health within the Department of Health and Ageing.

The APVMA uses robust risk assessment methods to scientifically evaluate new and existing pesticides and veterinary medicines to protect the health and safety of people, animals, and the environment and to support international trade. The APVMA gives considerable attention to operating a system for regulating pesticides and veterinary medicines that is efficient, effective, open and transparent and gives opportunity for public input.

As referred to in the Agriculture, Fisheries and Forestry Portfolio Additional Estimates Statements 2010–11, the government announced in its 2010–11 mid-year economic and fiscal outlook statement funding of $8.75 million over four years to support reforms to the regulation of agricultural and veterinary (agvet) chemicals in Australia.

These reforms aim to improve the systems that protect human health and the environment; reduce the regulatory burdens on industry and businesses; and enhance the APVMA’s business and operational functions. This funding will also enable the APVMA to upgrade its information and communications technology infrastructure.

The focus of the 2011–12 financial year will be embedding the reform changes agreed to by Cabinet.

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1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: Australian Pesticides and Veterinary Medicines Authority resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriation available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 Ordinary annual services 1 Departm ental appropriation Prior year departmental appropriation2 - - - - Departmental appropriation3 - 6,482 6,482 3,150 s. 31 Relevant agency receipts4 - 300 300 420 Total available annual appropriations A - 6,782 6,782 3,570 Special appropriations Special appropriations lim ited by criteria/entitlem ent Agricultural and Veterinary Chemicals (Administration) Act 1992 - 26,738 26,738 26,387 Total special appropriations B - 26,738 26,738 26,387 Total appropriations excluding special accounts (A+B) - 33,520 33,520 29,957 Special accounts Opening balance5 11,635 - 11,635 9,056 Appropriation receipts6 - 33,220 33,220 29,537 Total special accounts C 11,635 33,220 44,855 38,593 Total resourcing (A+B+C) 11,635 66,740 78,375 68,550 Less appropriations draw n from - (33,220) (33,220) (29,537) annual or special appropriations above and credited to special accounts and/or CAC Act bodies through annual appropriations Total net resourcing for the APVMA 11,635 33,520 45,155 39,013 1 Appropriation Bill (No.1) 2011–12. 2 Estimated adjusted balance carried forward from previous year. 3 Includes an amount of $0.375 million in 2011–12 for the Departmental Capital Budget (refer to table 3.2.5 for further details). For accounting purposes this amount has been designated as 'contributions by owners'. 4 s. 31 Relevant Agency receipts — estimate. 5 Estimated opening balance for special accounts. For further information on special accounts see Table 3.1.2.

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6 Appropriation receipts from APVMA annual and special appropriations for 2010–11 included above.

Reader note: All figures are GST exclusive.

Third party payments from and on behalf of other agencies 2011–12 2010–11 $'000 $'000 Receipts received from other agencies for the provision of (disclosed above w ithin departmental section 31) 233 332 Paym ents m ade to other agencies for the provision of (disclosed above) 4,374 3,667 4,607 3,999

1.3 BUDGET MEASURES

Budget measures relating to APVMA are detailed in Budget Paper No. 2 and are summarised below.

Table 1.2: Australian Pesticides and Veterinary Medicines Authority 2011-12 Budget measures Program 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Expense m easures Efficiency dividend – temporary increase in the rate1 1.1 Departmental expenses - (31) (11) (13) (12) Total - (31) (11) (13) (12) Total expe nse m easures Departmental - (31) (11) (13) (12) Total - (31) (11) (13) (12) Capital m easures Efficiency dividend – temporary increase in the rate1 1.1 Departmental capital - (2) - - - Total - (2) - - - Total capital m easures Departmental - (2) - - - Total - (2) - - - 2 The lead agency for the ‘Efficiency dividend – temporary increase in the rate’ is the Department of Finance and Deregulation. The full measure description appears in Budget Paper No.2 under the Cross Portfolio section.

Prepared on a Government Finance Statistics (fiscal) basis

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Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of the APVMA in achieving government outcomes.

Outcome 1: Protection of the health and safety of people, animals, the environment, and agricultural and livestock industries through regulation of pesticides and veterinary medicines.

Outcome 1 Strategy The role of the APVMA is to independently evaluate the safety and performance of pesticides and veterinary medicines intended for sale, ensuring that the health and safety of people, animals and crops, the environment and trade are protected. All registered products must be shown to work and be safe for people and the environment. Registered products must also not unduly jeopardise Australia’s trade with other nations.

To ensure that only those products that meet the APVMA’s requirements are actually supplied, the APVMA constantly monitors the market for compliance. The APVMA also reviews registered chemicals products to ensure that they continue to meet contemporary standards.

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Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1 by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: Protection of the health and safety of people, 2010–11 2011–12 anim als, the environm ent, and agricultural and livestock Estimated Estimated industries through regulation of pesticides and veterinary actual expenses m edicines. expenses $'000 $'000 Program 1.1: Australian Pesticides and Veterinary Medicines Authority Departmental expenses Departmental appropriation1 3,603 6,442 Special appropriations 23,289 25,600 Expenses not requiring appropriation in the budget year2 604 722 Total expenses for Outcom e 1 27,496 32,764

2010–11 2011–12 Estimated Estimated actual budget Average Staffing Level (num ber) 154 173 1 Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s. 31)’. 2 Expenses not requiring appropriation in the budget year is made up of depreciation expense, amortisation expense, make good expense, and audit fees received free of charge.

Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change.

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Contributions to Outcome 1

Program 1.1: Australian Pesticides and Veterinary Medicines Authority

Program objective Protect the health and safety of people, animals, the environment, agricultural and livestock industries through regulation of pesticides and veterinary medicines.

Program expenses 2010–112010–112011–122011–122012–132012–13 2013–142013–14 2014–15 Key Performance RevisedRevisedBudgetBudgetForwForw ard ard ForwForw ard ard Forw ard Indicators budgetbudgettarget yearyear 1 1 yearyear 2 2 year 3 Adverse experience reports from <1% $'000 <1%$'000 <1%$'000 <1%$'000 $'000<1% Annualthe use departmentalof products leading expenses: to significantDepartmental regulatory appropriation action. 3,603 6,442 1,370 1,359 1,139 InstancesSpecial appropriations of significant regulatory 5 23,289 25,6005 27,8847 27,3717 29,1327 Expensesaction resulting not requiring from non- appropriation in compliance w ith registration the budget year1 604 722 658 647 682 Compliance w ith maximum 99% 99% 99% 99% 99% Total program expens es 27,496 32,764 29,912 29,377 30,953 residues limits in food commodities 1 Expenses not requiring appropriation in the budget year is made up of depreciation expense, for amortisationpesticides and expense, veterinary make good expense and audit fees received free of charge. medicines (Australian National

243 APVMA Budget Statements

Program 1.1 Deliverables The APVMA aims to deliver an efficient and effective system of regulation of pesticides and veterinary medicines by:  using robust risk based methods to scientifically evaluate pesticides and veterinary medicines used in Australia  keeping all our stakeholders informed of regulatory matters and consider their views (17 meetings are held with APVMA stakeholder groups annually)  reviewing existing chemicals to ensure contemporary standards are met (five per year)  seeking and using stakeholder feedback to inform regulatory activities  requiring and monitoring compliance with legislative requirements to maintain confidence in the regulatory framework  identifying and managing emerging regulatory issues. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Determine product applications 86% 88% 90% 90% 90% w ithin the statutory timeframe. Determine active constituent 50% 55% 60% 60% 60% applications w ithin the statutory timeframe. Determine permit applications 85% 85% 85% 85% 85% w ithin the statutory timeframe.

Program 1.1 Key Performance Indicators To develop these key performance indicators it has been assumed that the functions and powers of the APVMA will remain largely unchanged. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Adverse experience reports from <1% <1% <1% <1% <1% the use of products leading to significant regulatory action. Instances of significant regulatory 5 5 7 7 7 action resulting from non- compliance w ith registration Compliance w ith maximum 99% 99% 99% 99% 99% residues limits in food commodities for pesticides and veterinary medicines (Australian National

244 APVMA Budget Statements

Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years The APVMA does not have any movement of administered funds.

Table 3.1.1: Estimates of special account flows and balances Opening Closing balance Receipts Payments Adjustments balance 2011–12 2011–12 2011–12 2011–12 2011–12 2010–11 2010–11 2010–11 2010–11 2010–11 Outcome $'000 $'000 $'000 $'000 $'000 Australian Pesticides and 1 11,635 33,220 32,375 - 12,480 Veterinary Medicines 9,056 29,537 26,958 - 11,635 Authority Special Account – s. 58, Agricultural and Veterinary Chemicals (Administration) Act 1992 Total special accounts 2011–12 Budget estim ate 11,635 33,220 32,375 - 12,480 Total special accounts 2010–11 estimated actual 9,056 29,537 26,958 - 11,635

3.1.3 Australian Government Indigenous Expenditure The 2011–12 Australian Government Indigenous Statement is not applicable because the APVMA has no indigenous specific expenses.

245 APVMA Budget Statements

3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Analysis of budgeted financial statements Income Statement In 2011–12, the total revenue for the APVMA is budgeted to be $33.2 million, an increase of $3.2 million compared to the estimated actual for 2010–11. This is due to the increase in Better Regulation of Agvet Chemicals budget measure funding in 2011–12 compared to 2010–11.

Similarly, total expenditure in 2011–12 is budgeted to be $5.3 million higher than the 2010–11 estimate due to the costs associated with the implementation of the Better Regulation of Agvet Chemicals reforms.

Balance Sheet The APVMA’s budgeted total asset position of $16.6 million at 30 June 2012 is $1.0 million higher compared to the estimated balance at 30 June 2011.

Total liabilities at 30 June 2012 are budgeted to increase slightly from the 30 June 2011 estimated balance of $9.4 million to $9.6 million.

As the APVMA’s revenue can vary significantly from year-to-year as a result of fluctuations in agricultural and veterinary (agvet) chemical sales, the APVMA aims to maintain equity levels that allow revenue fluctuations to be managed.

The equity target is currently set at three months operating expenses (about $6.0 million). At 30 June 2011 the APVMA’s equity is estimated to be $6.2 million, just above its target.

246 APVMA Budget Statements

Revenue from government 29,522 32,831* 29,577* 29,038* 30,611* Surplus (Deficit) attributable to the Australian Governm ent 2,479 400 - - - OTHER COMPREHENSIVE INCOME Changes in asset revaluation reserves - - - - - Total other com prehensive incom e - - - - - Total com prehensive incom e attributable to the Australian Governm ent 2,479 400 - - -

Note: Reconciliation of com prehensive incom e attributable to the agency 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 Total com prehensive incom e (loss) attributable to the Australian Governm ent 2,479 400 - - - plus non-appropriated expenses depreciation and amortisation expenses 551 659 600 590 622 Total com prehensive incom e (loss) attributable to the agency 3,030 1,059 600 590 622 Prepared on Australian Accounting Standards basis.

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Table 3.2.2: Budgeted departmental balance sheet (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS Financial assets Cash and cash equivalents 11,422 12,251 12,593 12,860 13,190 Trade and other receivables 1,390 1,424 1,459 1,495 1,533 Total financial assets 12,812 13,675 14,052 14,355 14,723 Non-financial assets Land and buildings 1,516 1,246 1,000 758 503 Property, plant and equipment 376 382 410 442 462 Intangibles 546 944 982 1,022 1,055 Other 350 350 350 350 350 Total non-financial assets 2,788 2,922 2,742 2,572 2,370 Total assets 15,600 16,597 16,794 16,927 17,093 LIABILITIES Payables Suppliers 3,422 3,508 3,596 3,686 3,778 Other 878 809 702 554 361 Total payables 4,300 4,317 4,298 4,240 4,139 Provisions Employee provisions 4,785 4,977 5,176 5,383 5,598 Other 309 324 341 325 377 Total provisions 5,094 5,301 5,517 5,708 5,975 Total liabilities 9,394 9,618 9,815 9,948 10,114 Net assets 6,206 6,979 6,979 6,979 6,979 EQUITY* Parent entity interest Contributed equity - 373 373 373 373 Reserves 140 140 140 140 140 Retained surplus (accumulated deficit) 6,066 6,466 6,466 6,466 6,466 Total equity 6,206 6,979 6,979 6,979 6,979 * 'Equity' is the residual interest in assets after deduction of liabilities. Prepared on Australian Accounting Standards basis.

248 APVMA Budget Statements

Table 3.2.3: Budgeted departmental statement of cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Appropriations 29,522 32,872 29,584 29,046 30,602 Net GST received 1,037 1,211 1,107 1,094 1,150 Other 420 300 301 304 305 Total ca sh received 30,979 34,383 30,992 30,444 32,057 Cash us ed Employees 17,486 20,881 19,021 18,672 19,664 Suppliers 10,509 12,253 11,209 11,085 11,643 Total ca sh used 27,995 33,134 30,230 29,757 31,307 Net cash from (used by) operating activities 2,984 1,249 762 687 750 INVESTING ACTIVITIES Cash received Proceeds from sales of property, plant and equipment - - - - - Total ca sh received - - - - - Cash us ed Purchase of property, plant and equipment 420 795 420 420 420 Total ca sh used 420 795 420 420 420 Net cash from (used by) investing activities (420) (795) (420) (420) (420) FINANCING ACTIVITIES Cash received Contributed equity - 375 - - - Total ca sh received - 375 - - - Net cash from (used by) financing activities - 375 - - - Net increase (de crease) in cash held 2,564 829 342 267 330 Cash and cash equivalents at the beginning of the reporting period 8,858 11,422 12,251 12,593 12,860 Cash and cash equivalents at the end of the reporting period 11,422 12,251 12,593 12,860 13,190 Prepared on Australian Accounting Standards basis.

249 APVMA Budget Statements

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2011–12) Retained Asset Contributed Total earnings revaluation equity/ equity reserve capital $'000 $'000 $'000 $'000 Opening balance as at 1 July 2011 Balance carried forw ard from previous period 6,066 140 - 6,206 Adjustment for changes in accounting policies - - - - Adjusted opening balance 6,066 140 - 6,206 Com prehensive incom e Other comprehensive income - - - - Surplus (deficit) for the period 400 - - 400 Total comprehensive income 400 - - 400 of w hich: Attributable to the Australian Government 400 - - 400 Transactions w ith ow ners Contributions by owners Departmental Capital Budget (DCBs) - - 373 373 Sub-total transactions with owners - - 373 373 Transfers betw een equity components - - - - Estim ated closing balance as at 30 June 2012 6,466 140 373 6,979 Closing balance attributable to the Australian Governm ent 6,466 140 373 6,979 Prepared on Australian Accounting Standards basis.

250 APVMA Budget Statements

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 CAPITAL APPROPRIATIONS Capital budget – Bill 1 (DCB) - 373 - - - Total capital appropriations - 373 - - - Total new capital appropriations represented by: Purchase of non-financial assets - 373 - - - Total item s - 373 - - - PURCHASE OF NON-FINANCIAL ASSETS Funded by capital appropriation – DCB1 - 373 - - - Funded internally from departmental resources2 420 420 420 420 420 TOTAL 420 793 420 420 420 RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 420 795 420 420 420 Total cash used to acquire assets 420 795 420 420 420 1 Does not include annual finance lease costs. Include purchase from current and previous years Departmental Capital Budgets. 2 Includes the following sources of funding: – annual and prior year appropriations – donations and contributions – gifts – internally developed assets – s. 31 relevant agency receipts – proceeds from the sale of assets

Prepared on Australian Accounting Standards basis.

251 APVMA Budget Statements

Table 3.2.6: Statement of asset movements (2011–12) Buildings Other property, Intangibles Total plant and equipment $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 1,837 580 2,405 4,822 Accumulated depreciation/amortisation and impairment (321) (204) (1,859) (2,384) Opening net book balance 1,516 376 546 2,438 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem e nt assets By purchase – appropriation ordinary annual services1 - - 373 373 By purchase – other - 250 170 420 Total additions - 250 543 793 Other m ovem ents Assets held for sale or in a disposal group held for sale Depreciation/amortisation expense (270) (244) (145) (659) Disposals2 From disposal of entities or operations (including restructuring) - - - - As at 30 June 2012 Gross book value 1,837 830 2,948 5,615 Accumulated depreciation/amortisation and impairment (591) (448) (2,004) (3,043) Closing net book balance 1,246 382 944 2,572 1 "Appropriation ordinary annual services" refers to funding provided through Appropriation Bill (No.1) 2011–12 for depreciation / amortisation expenses, DCBs or other operational expenses. 2 Proceeds may be returned to the Official Public Account (OPA).

Prepared on Australian Accounting Standards basis.

252 APVMA Budget Statements

Table 3.2.7: Schedule of budgeted income and expenses administered on behalf of Government (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 INCOME ADM INISTERED ON BEHALF OF GOVERNM ENT Revenue Taxation revenue Other 26,372 26,722 28,792 29,768 29,814 Total taxation revenue 26,372 26,722 28,792 29,768 29,814 Total revenues adm inistered on behalf of governm ent 26,372 26,722 28,792 29,768 29,814 Gains Total gains adm inistered on behalf of governm ent - - - - - Total incom e adm inistered on behalf of governm ent 26,372 26,722 28,792 29,768 29,814 EXPENSES ADMINISTERED ON BEHALF OF GOVERNM ENT Other - - - - - Total expe nses adm inistered on behalf of governm ent - - - - - Prepared on Australian Accounting Standards basis.

253 APVMA Budget Statements

Table 3.2.8: Schedule of budgeted assets and liabilities administered on behalf of government (as at 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 ASSETS ADM INISTERED ON BEHALF OF GOVERNM ENT Financial assets Cash and cash equivalents 455 471 487 504 522 Total financial assets 455 471 487 504 522 Non-financial assets Total non-financial assets - - - - - Total asse ts adm inistered on behalf of governm ent 455 471 487 504 522 LIABILITIES ADMINISTERED ON BEHALF OF GOVERNM ENT Payables Other 455 471 487 504 522 Total payables 455 471 487 504 522 Provisions Total provisions - - - - - Total liabilities adm inistered on behalf of governm ent 455 471 487 504 522 Prepared on Australian Accounting Standards basis.

254 APVMA Budget Statements

Table 3.2.9: Schedule of budgeted administered cash flows (for the period ended 30 June) Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 OPERATING ACTIVITIES Cash received Taxes 26,387 26,738 28,808 29,785 29,832 Total cash received 26,387 26,738 28,808 29,785 29,832 Cash used Other - - - - - Total cash used - - - - - Net cash from (used by) operating activities 26,387 26,738 28,808 29,785 29,832 INVESTING ACTIVITIES Net cash from (used by) investing activities - - - - - FINANCING ACTIVITIES Net cash from (used by) financing activities - - - - - Net increase (decrease) in cash held 26,387 26,738 28,808 29,785 29,832 Cash and cash equivalents at beginning of reporting period 440 455 471 487 504 Cash to Official Public Account for: – Special accounts (26,372) (26,722) (28,792) (29,768) (29,814) Cash and cash equivalents at end of reporting period 455 471 487 504 522 Prepared on Australian Accounting Standards basis.

255 WHEAT EXPORTS AUSTRALIA

Section 1: Agency overview and resources 259 1.1 Strategic direction statement 259 1.2 Agency resource statement 260 1.3 Budget measures 260 Section 2: Outcomes and planned performance 261 2.1 Outcomes and performance information 261 Section 3: Explanatory tables and budgeted financial statements 265 3.1 Explanatory tables 265 3.2 Budgeted financial statements 266

1 WHEAT EXPORTS AUSTRALIA

Section 1: Agency overview and resources

1.1 STRATEGIC DIRECTION STATEMENT

Wheat Exports Australia (WEA) is established under the Wheat Export Marketing Act 2008 and the Wheat Export Marketing (Repeal and consequential Amendments) Act 2008 and is also a prescribed agency under the Financial Management and Accountability Act 1997.

The primary objective of WEA is to regulate the export of bulk wheat from Australia through the Wheat Export Accreditation Scheme (Scheme) and inform government and growers of outcomes. The wheat marketing arrangements under the Scheme are intended to increase competition in the bulk wheat export market. The arrangements provide for WEA to accredit exporters which meet the specified ‘fit and proper’ criteria and for WEA to exercise its monitoring and enforcement powers to ensure that a competitive wheat marketing regime is achieved and maintained. In support of the objective, WEA’s work concentrates on the administration of the Scheme efficiently and effectively. WEA also carries out investigations as directed by the minister.

In accordance with the requirements of Section 89 of the Wheat Export Marketing Act 2008, Productivity Commission conducted a review of Australia’s wheat export marketing arrangements including WEA’s operation and the Scheme. A final report was presented to the Assistant Treasurer on 1 July 2010. The government is yet to make a decision. WEA stands ready to implement whatever changes the government may decide in response to that report. At the time of the preparation of the 2011–12 budget, WEA makes the assumption that WEA retains the current system until advised otherwise.

2 WEA Budget Statements

1.2 AGENCY RESOURCE STATEMENT

Table 1.1 shows the total resources from all sources. The table summarises how resources will be applied by outcome and by administered and departmental classification.

Table 1.1: Wheat Exports Australia resource statement — Budget estimates for 2011–12 as at Budget May 2011 Estim ate Proposed Total Actual of prior at Budget Estim ate available year appropriatio available in 2011–12 2011–12 2011–12 2010–11 $'000 $'000 $'000 $'000 Ordinary annual services Departm ental appropriation s. 31 Relevant agency receipts1 - 145 145 95 Total ordinary annual services A - 145 145 95 Special appropriations Special appropriations lim ited by criteria/entitlem ent Wheat Export Marketing Act 2008 – s. 58 - 3,340 3,340 2,944 Total special appropriations B - 3,340 3,340 2,944 Total appropriations excluding special accounts - 3,485 3,485 3,039 Special accounts Opening balance2 687 - 687 1,094 Appropriation receipts3 - 3,485 3,485 3,039 Total special accounts C 687 3,485 4,172 4,133 Total resourcing (A+B+C) 687 6,970 7,657 7,172 Less appropriations draw n from - (3,485) (3,485) (4,133) annual or special appropriations above and credited to special accounts and/or CAC Act bodies through annual appropriations Total net resourcing for WEA 687 3,485 4,172 3,039 1 s. 31 Relevant Agency receipts — estimate. 2 Estimated opening balance for special accounts. For further information on special accounts see table 3.1.2. 3 Appropriation receipts included above.

All figures are GST exclusive.

1.3 BUDGET MEASURES

WEA is not affected by any 2011–12 budget measures.

3 WEA Budget Statements

Section 2: Outcomes and planned performance

2.1 OUTCOMES AND PERFORMANCE INFORMATION

Each outcome is described below together with its related programs, specifying the performance indicators and targets used to assess and monitor the performance of Wheat Exports Australia in achieving government outcomes.

Outcome 1: A bulk wheat export market with multiple exporters providing more choice for growers, through administration of the Wheat Export Accreditation Scheme.

Outcome 1 Strategy As outlined above in 1.1 Strategic Direction Statement, a recent Productivity Commission Review recommended the abolition of WEA by 30 September 2011. However, the government is yet to make a decision. Therefore, WEA will operate its business as usual.

4 WEA Budget Statements

Outcome 1 expense statement Table 2.1 provides an overview of the total expenses for outcome 1 by program.

Table 2.1: Budgeted expenses for outcome 1 Outcom e 1: A bulk w heat export m arket w ith m ultiple 2010–11 2011–12 exporters providing m ore choice for grow ers, through Estimated Estimated adm inistration of the Wheat Export Accreditation Schem e. actual expenses expenses $'000 $'000 Program 1.1: Wheat Exports Australia Departmental expenses Departmental appropriation1 91 146 Special appropriations 3,070 3,175 Expenses not requiring appropriation in the budget year2 200 727 Total for Program 1.1 3,361 4,048 Outcom e 1 Totals by appropriation type Departmental expenses Departmental appropriation1 91 146 Special appropriations 3,070 3,175 Expenses not requiring appropriation in the budget year2 200 727 Total expenses for Outcom e 1 3,361 4,048

2010–11 2011–12 Average Staffing Level (num ber) 11 14 1 Departmental appropriation combines "Ordinary annual services (Appropriation Bill No. 1)" and "Revenue from independent sources (s. 31)". 2 Expenses not requiring appropriation in the budget year are made up of depreciation expense, amortisation expense and audit fees.

Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change.

5 WEA Budget Statements

Contributions to Outcome 1

Program 1.1: Wheat Exports Australia

Program objective The purpose of the program is to administer the Wheat Export Accreditation Scheme 2008 to accredit bulk wheat exporters by attesting that an exporter is a fit and proper company to export bulk wheat from Australia.

Program expenses The increase from 2010–11 to 2011–12 relates to the increase in staffing and operating expenses. This is related to the expected increase in accreditation activities in 2011–12. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard budget year 1 year 2 year 3 $'000 $'000 $'000 $'000 $'000 Special account expenses: Wheat Exports Australia Special Account 3,361 4,048 3,956 4,051 4,126 Total program expenses 3,361 4,048 3,956 4,051 4,126

Program 1.1 Deliverables  Promote the development of a bulk wheat export marketing industry that is efficient, competitive and responsive to the needs of wheat growers.  Provide a regulatory framework for exporters participating in the bulk wheat export trade. 2010–11 2011–12 2012–13 2013–14 2014–15 Revised Budget Forw ard Forw ard Forw ard Deliverables budget year 1 year 2 year 3 Make timely decisions on all 6 w eeks. 6 w eeks. 6 w eeks. 6 w eeks. 6 w eeks. complete applications under the Scheme in an effective, efficient and impartial manner. Review a decision in an effective, 30 days. 30 days. 30 days. 30 days. 30 days. efficient, fair and timely manner. Assess exporter compliance w ith 100% 100% 100% 100% 100% their accreditation conditions Conduct external audits on half of 100% 100% 100% 100% 100% all active accredited exporters Report on the operation of the 1 1 1 1 1 Scheme. Provide information updates on an 4 4 4 4 4 aspect of the operation of the w heat export market annually. Notify applicants w ithin 14 days of 100% 100% 100% 100% 100% a decision made in relation to their application under the Scheme.

6 WEA Budget Statements

Program 1.1 Key Performance Indicators Wheat Exports Australia’s performance is measured through the successful completion of key deliverables and services. 2010–11 2011–12 2012–13 2013–14 2014–15 Key Performance Revised Budget Forw ard Forw ard Forw ard Indicators budget target year 1 year 2 year 3 Process the accreditation 100% 100% 100% 100% 100% application w ithin six w eeks of receiving a complete application. Complete external audits on 100% 100% 100% 100% 100% targeted accredited exporters. Publish a report for grow ers that 1 1 1 1 1 is timely, relevant, assessable and easy-to-read by 30 December. WEA is fully funded by the w heat 95% 100% 100% 100% 100% industry.

7 WEA Budget Statements

Section 3: Explanatory tables and budgeted financial statements

3.1 EXPLANATORY TABLES

3.1.1 Movement of administered funds between years WEA does not have any administered funds.

Table 3.1.1: Estimates of special account flows and balances Opening Closing balance Receipts Payments Adjustments balance 2011–12 2011–12 2011–12 2011–12 2011–12 2010–11 2010–11 2010–11 2010–11 2010–11 Outcome $'000 $'000 $'000 $'000 $'000 Wheat Exports Australia Special Account – s. 21 FMA 1 687 3,485 4,056 - 116 Act 1997 (D) 1,094 3,039 3,446 - 687 Total special accounts 2011–12 Budget estim ate 687 3,485 4,056 - 116 Total special accounts 2010–11 estimated actual 1,094 3,039 3,446 - 687 (D) = Departmental

3.1.3 Australian Government Indigenous Expenditure WEA has no indigenous specific expenditure.

8 WEA Budget Statements

3.2 BUDGETED FINANCIAL STATEMENTS

3.2.1 Differences in agency resourcing and financial statements The financial statements are prepared on an accrual basis where revenues and expenses are recognised and when the resources are received and used. WEA’s agency resourcing table recognises the cash resources available to be used during the period.

3.2.2 Analysis of budgeted financial statements WEA is a non profit agency and is expected to operate on a cost-recovery basis. Major sources of WEA’s income are from fees for accreditation related activities and the wheat export charge (WEC) which is set at $0.22 per tonne and derived from wheat physically exported. The production estimates are very sensitive to seasonal conditions including the amount of rainfall received in key cropping areas and price fluctuations in international wheat markets. Therefore WEA’s budget revenue estimate is only indicative. WEA is budgeting for an operating deficit of $0.69 million. This is based upon a possible impact to the wheat harvest from the recent flooding events in Queensland and Victoria and drought conditions in Western Australia.

Total expenditure for 2011–12 is budgeted to be $4.05 million, an increase of $0.69 million on the estimated 2010–11 actual expenditure. This increase is due to an expectation of higher accreditation activities during 2011–12.

9 WEA Budget Statements

Revenue from government - *- -* -* -* Surplus (Deficit) (165) (692) - - - Surplus (Deficit) attributable to the Australian Governm ent (165) (692) - - - Total com prehensive incom e attributable to the Australian Governm ent (165) (692) - - - Prepared on Australian Accounting Standards basis.

10 WEA Budget Statements

11 WEA Budget Statements

12 WEA Budget Statements

Table 3.2.5: Departmental capital budget statement Estimated Budget Forw ard Forw ard Forw ard actual estimate estimate estimate estimate 2010–11 2011–12 2012–13 2013–14 2014–15 $'000 $'000 $'000 $'000 $'000 PURCHASE OF NON-FINANCIAL ASSETS Funded internally from departmental resources2 30 100 - - - TOTAL 30 100 - - - RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE Total purchases 30 100 - - - Total cash used to acquire assets 30 100 - - - Prepared on Australian Accounting Standards basis.

13 WEA Budget Statements

Table 3.2.6: Statement of asset movements (2011–12) Buildings Other property, Intangibles Total plant and equipment $'000 $'000 $'000 $'000 As at 1 July 2011 Gross book value 29 29 96 154 Accumulated depreciation/amortisation and impairment (23) (12) (57) (92) Opening net book balance 6 17 39 62 CAPITAL ASSET ADDITIONS Estim ated expenditure on new or replacem ent assets By purchase – other - 100 - 100 Total additions - 100 - 100 Other m ovem ents Depreciation/amortisation expense (6) (19) (11) (36) As at 30 June 2012 Gross book value 29 129 96 254 Accumulated depreciation/amortisation and impairment (29) (31) (68) (128) Closing net book balance - 98 28 126 Prepared on Australian Accounting Standards basis.

PORTFOLIO GLOSSARY

AAA Agriculture Advancing Australia.

AAWS Australian Animal Welfare Strategy.

ABARES Australian Bureau of Agricultural and Resource Economics and Sciences.

ABC Australian Broadcasting Corporation.

Accrual accounting System of accounting where items are brought to account and included in the financial statements as they are earned or incurred, rather than as they are received or paid.

Accumulated The aggregate depreciation recorded for a particular depreciation depreciating asset.

Additional estimates Where amounts appropriated at budget time are insufficient, Parliament may appropriate more funds to portfolios through the Additional Estimates Acts.

Administered Revenues, expenses, assets or liabilities managed by agencies on behalf of the Commonwealth. Agencies do not control administered items. Administered expenses include grants, subsidies and benefits. In many cases, administered expenses fund the delivery of third party outputs.

AFMA Australian Fisheries Management Authority.

Agvet Agricultural and veterinary.

Annual Two appropriation Bills are introduced into Parliament in Appropriation May and comprise the Budget for the financial year beginning 1 July. Further Bills are introduced later in the financial year as part of the additional estimates. Parliamentary departments have their own appropriations.

Appropriation An authorisation by Parliament to spend moneys from the Consolidated Revenue Fund for a particular purpose.

APVMA Australian Pesticides and Veterinary Medicines Authority.

AQIS Australian Quarantine and Inspection Service.

ASA Australian Sugar Industry Alliance.

16 Portfolio Glossary

CAC Act Commonwealth Authorities and Companies Act 1997.

Capital expenditure Expenditure by an agency on capital projects, for example purchasing a building.

CCRSPI Climate Change Research Strategy for Primary Industries.

CNCB Community Networks and Capacity Building.

COAG Council of Australian Governments.

CRC Cooperative Research Centre.

CRDC Cotton Research and Development Corporation.

CRF Consolidated Revenue Fund. Section 81 of the Constitution stipulates that all revenue raised or money received by the Commonwealth forms the one consolidated revenue fund.

CRRDC Council of Rural Research and Development Corporations.

CSIRO Commonwealth Scientific and Industrial Research Organisation.

DAFF Department of Agriculture, Fisheries and Forestry.

DCB Departmental capital budget.

DCCEE Department of Climate Change and Energy Efficiency.

DEEDI Queensland Department of Employment, Economic Development and Innovation.

Departmental Revenue, expenses, assets and liabilities that are controlled by the agency in providing its outputs. Departmental items would generally include computers, plant and equipment assets used by agencies in providing goods and services and most employee expenses, supplier costs and other administrative expenses incurred.

Depreciation Apportionment of an asset’s capital value as an expense over its estimated useful life to take account of normal usage, obsolescence, or the passage of time.

EC Exceptional Circumstances.

EPR End Point Royalties.

17 Portfolio Glossary

Equity or net assets Residual interest in the assets of an entity after deduction of its liabilities.

Expense Total value of all of the resources consumed in producing goods and services or the loss of future economic benefits in the form of reductions in assets or increases in liabilities of an entity.

Fair value Valuation methodology: the amount for which an asset could be exchanged, or a liability settled, between knowledgeable and willing parties in an arm’s length transaction. The fair value can be affected by the conditions of the sale, market conditions and the intentions of the asset holder.

FAO Food and Agricultural Organization of the United Nations.

FRDC Fisheries Research and Development Corporation.

FMA Act Financial Management and Accountability Act 1997.

FSANZ Food Standards Australia New Zealand.

GRDC Grains Research and Development Corporation.

GM Genetically modified.

GST Goods and Services Tax.

GVP Gross value of production.

GWRDC Grape and Wine Research and Development Corporation.

ICT Information and communication technology.

IIS Interim Income Support.

Intermediate More specific medium-term impacts (for example, trend outcomes data, targets or milestones) below the level of the planned outcomes specified in the budget. A combination of several intermediate outcomes can at times be considered as a proxy for determining the achievement of outcomes or progress towards outcomes (see outcomes).

IRA Import Risk Analysis.

Items The level at which funds are appropriated from the

18 Portfolio Glossary

consolidated revenue.

IUU Illegal, unregulated and unreported.

KPI Key Performance Indicator.

MPAs Marine Protected Areas.

NPSI National Program for Sustainable Irrigation.

NRIA New Rural Industries Australia.

NRM Natural Resource Management.

NVT National Variety Trials.

OPA Official Public Account.

Operating result Equals revenue less expense.

Outcomes The government’s objectives in each portfolio area. Outcomes are desired results, impacts or consequences for the Australian community as influenced by the actions of the Australian Government. Actual outcomes are assessments of the end-results or impacts actually achieved.

PB Statements Portfolio Budget Statements.

PC Productivity Commission.

PIERD Act Primary Industries and Energy Research and Development Act 1989.

PISC Primary Industries Standing Committee.

Programs A logical aggregation of agency items for the provision of adequate information for key performance monitoring and measurement of deliverables.

R&D Research and Development.

RIRDC Rural Industries Research and Development Corporation.

RDC Research and Development Corporation.

RD&E Research, Development and Extension.

Revenue Total value of resources earned or received to cover the

19 Portfolio Glossary

production of goods and services.

RFA Regional Forest Agreement.

SFA Statutory Funding Agreement.

SIEVs Suspected illegal entry vessel.

Special account Balances existing within the Consolidated Revenue Fund (CRF) that are supported by standing appropriations (Financial Management and Accountability (FMA) Act 1997, subsection 20 and 21). Special accounts allow money in the CRF to be acknowledged as set-aside (hypothecated) for a particular purpose. Amounts credited to a special account may only be spent for the purposes of the special account. Special accounts can only be established by a written determination of the Finance Minister (section 20 FMA Act) or through an Act of Parliament (referred to in section 21 of the FMA Act).

Special An amount of money appropriated by a particular Act of appropriations Parliament for a specific purpose and number of years. For (including standing special appropriations the authority to withdraw funds from appropriations) the Consolidated Revenue Fund does not generally cease at the end of the financial year.

Standing appropriations are a sub-category consisting of ongoing special appropriations— the amount appropriated will depend on circumstances specified in the legislation.

SRDC Sugar Research and Development Corporation.

TEP Threatened, endangered and protected species.

UK United Kingdom.

USA United States of America.

WAC Wine Australia Corporation.

WEA Wheat Exports Australia.

WEC Wheat Export Charge.

WRAA Wine Restructuring Action Agenda.