Online version of the 2013-14 Department of Health Annual Report

Financial Performance—Departmental

Page last updated: 31 October 2014

Departmental operating result

The Department of Health recorded a combined 2013-14 operating deficit of $40.5 million under the net cash appropriation model, introduced by the Commonwealth in 2010-11 (compared with $52.1 million in 2012-13). On elimination of unfunded depreciation, the combined group recorded an operating deficit of $2.4 million compared to an approved deficit of $5.1 million.

Departmental revenue

Revenue from Government decreased by 8% to $575.4 million

During 2013-14, revenue from Government decreased by 8% ($49.3 million) to $575.4 million.

The Department’s 2013-14 departmental appropriation revenue has been adjusted as a result of:

  • prior year departmental measure movements (decrease of $7.4 million);
  • new departmental budget funding (increase of $42.4 million); less
  • impact of the Strategic Review Measure (decrease of $15.3 million);
  • additional efficiency dividends and whole-of-government saves measures (decrease of $2.0 million); and
  • Section 32 transfers resulting from the AAO announced in September 2013 (decrease of $67.0 million).

Own source revenue decreased by 0.2% to $158.8 million

During 2013-14, revenue from the sale of goods and rendering of services increased by 7% ($10.8 million) to $156.3 million primarily through an increase in the sale of goods and services in the Department’s cost recovery activities in the Therapeutic Goods Administration (TGA).

Other revenue primarily represents recoveries for payments made on behalf of portfolio agencies under a shared services arrangement. In 2013-14 recoveries were $14 million less than the previous year, in which significant establishment payments were made by the Department on behalf of agencies.

Departmental expenses

Total departmental expenses decreased by 8% to $775.1 million in 2013-14

Operating expenses decreased by 8% ($63.9 million) during 2013-14 to $775.1 million (2012-13: $839.0 million).

The major movements included:

  • a decrease in employee benefits of $96.7 million (17%) a result of lower staff numbers from Machinery of Government changes and downsizing the Department; offset by
  • an increase in other expenses of $27.9 million relating to payments ($42.0 million) made on behalf of the Department of Social Services, for Ageing and Aged Care staff, prior to transfer of payroll processing required as part of the AAO changes. This is offset by a reduction in payments (and recoveries) made for Health portfolio agencies under a shared services arrangement.

Departmental assets and liabilities

Movement in departmental assets and liabilities

Total assets have decreased by $103.0 million to $396.9 million (2012-13: $499.9 million). The major contributors were:

  • a decrease in receivables of $47.1 million primarily as a result of transferring appropriation receivable to cover employee entitlements for staff transferred to the Department of Social Services under the September 2013 AAO;
  • a decrease in the value of land and buildings of $22.2 million due to transferring certain leasehold improvements to the Department of Social Services and annual depreciation charges; and
  • intangible assets decreased by $38.4 million, $36.4 million of which related to the transfer of aged care software to the Department of Social Services.

Total liabilities have reduced by $28.2 million to $296.8 million (2012-13: $325.0 million). The major contributors were:

  • a decrease in employee provisions ($34.2 million) as a consequence of staff transferred under the September 2013 AAO; offset by
  • an increase in suppliers ($5.6 million) for amounts payable to trade creditors and operating leases.