You are here: Home >

Overview of financial performance in 2004-2005

AMSA, 15th Annual Report, 2004 - 2005

AMSA recorded a surplus of $4.468 million for 2004-2005 compared to a surplus of $4.097 million in 2003-2004.

Revenue

AMSA is largely self-funded through levies on the commercial shipping industry, the sale of goods and services and interest. AMSA receives Community Service Obligation (CSO) funding from the Federal Budget for its search and rescue functions and boating safety education. AMSA’s levies correspond to its major safety and pollution prevention functions:

Regulatory Functions Levy covers ship safety regulatory functions;
Marine Navigation Levy funds the national network of marine aids to navigation;
Protection of the Sea Levy covers marine pollution preparedness and response.

The levies are collected from the commercial shipping industry under the levy legislation and paid into the Consolidated Revenue Fund and then appropriated under the Australian Maritime Safety Authority Act 1990 as special appropriations.

The CSO funding comprises an annual appropriation for the personnel and infrastructure involved in providing search and rescue services and an annual administered appropriation for the costs of responding to search and rescue incidents (mainly the cost of hiring aircraft).

Levy revenue totalled $45.913 million at 30 June 2005, representing 65 per cent of total revenue in 2005-2006 compared to $48.307 million (70.6 per cent) in 2003-2004. Levy revenue was almost the same as the 2004-2005 Budget estimate of $45.938 million for the financial year. The slight reduction in levy revenue reflected the cut of 15 per cent in the rates for the Marine Navigation Levy and the Regulatory Functions Levy effective from 1 July 2004. Higher overall levy revenue receipts are expected in 2005-2006 with the anticipated continued growth of commodity exports and related shipping activity. The trend in levy receipts is illustrated in figure 1.

Figure 1 AMSA Levies Revenue

The Marine Navigation Levy has shown a downward trend over the last five years, with reductions in the rate of levy by 10 per cent from 1 July in 2000, 2001 and 2003 and 15 per cent in 2004, reflecting ongoing efficiency gains in AMSA’s administration of the national aids to navigation network.

The upward trend in the Regulatory Functions Levy contributed to AMSA’s expansion in its ship regulatory and standards compliance monitoring functions. This includes support for Australia’s active participation in the IMO in developing and promoting implementation and enforcement of international standards in ship safety and environmental protection. It also covers work in regional forums to strengthen port State control and Australia’s ship inspection program to deter substandard shipping.

The gradual growth in the Protection of Sea Levy has been directed into AMSA’s management of the national strategy for preparedness and response to ship sourced pollution, particularly oil and chemicals. This meets higher community expectations in relation to environment protection and pollution preparedness and response.

Community Services Obligation (CSO) funding totalled $25.553 million at 30 June 2005, representing 29.1 per cent of total revenue, comprising $20.553 million in annual appropriation and $5.0 million in administered appropriation. This compared to a total of $21.57 million (23.8 per cent of total revenue) in 2003-2004 comprising $16.27 million annual appropriation and $5.3 million annual administered appropriation. The trend in CSO funding receipts is illustrated in figure 2.

Figure 2 Community Service Obligation Funding

The variation in the level funding in 2001-2002 arose from AMSA no longer being required from 1 July 2002 to provide a maritime distress and safety communication service to small non-SOLAS vessels (ie vessels less than 300 tonnes). A one-off appropriation of $3.025 million was provided in 2001-2002 in relation to the Australian Government contribution towards States/Territories activities to assist in establishing a distress and safety communications network for these small vessels.

The growth in CSO funding in 2004-2005 relates to the Australian Government’s allocation in the 2004 Budget of $18.9 million additional funding over four years to AMSA to enhance its search and rescue capability throughout Australia.

These measures included the contracting of a turbine engine aircraft dedicated to search and rescue located in Darwin, which commenced service in February 2005, and the upgrading of communication and coordination services within AMSA’s Rescue Coordination Centre, which is expected to be completed by mid 2006.

Expenditure

Operating expenses in 2004-2005 totalled $66.134 million compared to $64.311 million in 2003-2004. This result was within a four per cent variation of the budget estimate of $68.574 million for the financial year.

The main elements of operating expenditure are employee and supplier expenses and depreciation. The trend in these components is shown in figure 3

.Figure 3 AMSA Operating Expenses

The decline in employee expenditure from 2000-2001 to 2001-2002 and the rise in service expenditure over the same period corresponded with the implementation of a substantial reform in AMSA’s service delivery. This included the external provision of shipping and maintenance services for the aids to navigation network during 2000-2001 and resultant rationalisation in relevant AMSA staffing.

The increase in supplier expenditure during 2004-2005 mainly reflects higher expenditure on technical consultancy and contract services and information technology services associated with implementation of the initiatives announced in the 2004 Federal Budget to strengthen AMSA’s search and rescue capacity.

November 2005