Chief Finance Officer's Report
Summary
The department’s vision is to create a single integrated transport network accessible to everyone. To support that vision, the department continues to monitor the financial landscape and ensure that financial resources are directed towards Government priorities.
The department operates within a strong financial framework—investing in our priorities, optimising own source revenue and conducting activities that deliver value for money and financial sustainability.
The 2019–20 financial year has proven to be a fiscally challenging year due to COVID-19. A significant drop in public transport patronage as a result of the pandemic, has seen a downturn of more than $71 million in fare revenue over the last year, impacting the department's financial result. However, through strong fiscal discipline, the department recorded an operating surplus of $126 million in 2019–20 and an underlying operating deficit of $105 million excluding capital contributions (4 per cent of total budget).
The department successfully delivered its $3.362 billion capital program ahead of schedule, due to accelerated delivery on a number of projects, including New Generation Rollingstock (NGR), the Mackay Ring Road and the Pacific Motorway (Mudgeeraba – Varsity Lakes).
The department has been a significant contributor to the government's COVID-19 recovery efforts to date, through a range of transport industry assistance measures such as the $55 million passenger transport assistance package and infrastructure stimulus initiatives, including the $400 million Accelerated Works Program. Additionally, to support the Queensland economy through COVID-19, the department moved to an immediate payment policy for all valid invoices to improve the cash flow of small to medium enterprises. This initiative is expected to continue until the impact of COVID-19 eases.
The department has not identified any climate related risks that could materially affect the amounts and disclosures reported in the financial statements at the reporting date. However, the department continues to monitor the emergence of such risks under the Queensland Government's Climate Adaptation Strategy.
The department will continue to be a major contributor to Queensland's economic recovery, creating jobs through the delivery of accelerated essential transport infrastructure and continuing to deliver frontline services through investment in customer-centric digitally-enabled transport solutions.
In accordance with the requirements of section 77(2)(b) of the Financial Accountability Act 2009, I have provided the Director-General with a statement that the financial internal controls of the department are operating efficiently, effectively and economically in compliance with section 54 of the Financial and Performance Management Standard 2019.
This financial summary provides an overview of the department’s financial results for 2019–20. A comprehensive set of financial statements is provided in this report, which includes an analysis of actual expenditure compared to the published budget with explanations of major variances.
Funding sources
Funding to meet departmental operational requirements, and for capital investment in the transport network, is received from the Queensland Government, the department's own sourced revenue, and allocations from the Australian Government. Funding from government comprises departmental services revenue, equity injections, and allocations from the Australian Government for capital and maintenance works on the National Network.
Key drivers of the department’s funding include the delivery of capital investment in the roads and transport infrastructure network and in the provision of our key objectives through operational service delivery. In 2019–20, the budgeted revenue for the department was $6.392 billion and the capital budget was $2.877 billion.
Administered revenue
The department administers, but does not control, certain resources on behalf of the Queensland Government. The main source of administered revenue is from user charges and fees from motor vehicle registrations, traffic fines, and other regulatory fees and fines.
Financial performance
The department recorded an operating surplus of $126 million for 2019–20. Table 1 summarises the financial results of the department's operations for 2019–20 and 2018–19.
Table 1: Summary of financial results of the department’s operations
| Category |
2019–20
$'000
|
2018–19
$'000
|
| Total income |
6,427,966 |
6,144,435 |
| Total expenses |
6,301,893 |
6,172,880 |
| Operating result for the year |
126,073 |
(28,445) |
Income
The department's total income of $6.428 billion included appropriation revenue from the Queensland Government of $5.441 billion, user charges of $671 million and grants and other contributions of $270 million. In 2019–20 the department's total income has increased by $285 million, predominantly as a result of increased state and Australian Government funding for infrastructure projects. Queensland Government appropriations are the main source of income and account for 85 per cent of total income earned in the reporting period.
Figure 1: Income by category for the year ended 30 June 2020
|
Category |
Income % |
$'000 |
|
Appropriation revenue |
84.65% |
5,440,647 |
|
User charges and fees |
10.44% |
671,121 |
|
Grants and other contributions |
4.19% |
269,614 |
|
Other revenue |
0.72% |
46,584 |
|
Total revenue |
|
6,427,966 |
Expenses
Total expenses for the department were $6.302 billion. Supplies and services was our largest spend category, constituting 59 per cent of total expenditure, followed by asset depreciation and amortisation, and employee expenses.
Approximately 76 per cent of total supplies and services consists of payments to operators of rail, bus, air and ferry services. Total expenses in 2019–20 has increased by $129 million.
Figure 2: Expenses by category for the year ended 30 June 2020
|
Category |
Income % |
$'000 |
|
Supplies and services |
59.03% |
3,719,341 |
|
Depreciation and amortisation |
18.35% |
1,156,399 |
|
Grants and subsidies |
9.68% |
610,219 |
|
Employee expenses |
10.05% |
633,538 |
|
Finance and borrowing costs |
1.93% |
121,778 |
|
Other |
0.96% |
60,618 |
|
Total expenses |
|
6,301,893 |
Financial position
The net assets position reported in the financial statements shows the net worth of the department. At 30 June 2020, this was $70.062 billion. Table 2 summarises the department’s financial position for 2019–20 and 2018–19.
Table 2: Summary of financial position – Assets and liabilities
| Category |
2019-20
$'000 |
2018-19
$'000 |
| Total assets |
72,623,445 |
67,262,349 |
| Total liabilities |
2,561,550 |
2,508,073 |
| Total equity |
70,061,895 |
64,754,276 |
At 30 June 2020 the department held assets totalling $72.623 billion, representing an increase of 8 per cent compared to the previous year. The variance between the years is primarily from movements in property, plant and equipment assets, including new assets of $3.0 billion, revalued assets of $3.7 billion - mainly arising from improved information used in estimating the useful life of complex infrastructure assets - offset by depreciation on assets of $1.1 billion. The department’s transport infrastructure network makes up 81 per cent of total assets and is valued at $58.702 billion. The department's infrastructure assets consist of $46.313 billion in roads, $12.068 billion in structures and $0.321 billion in other assets.
As at 30 June 2020, the department held liabilities totalling $2.562 billion which comprises mainly of lease liabilities, payables and provisions.
