7. Financial performance

2017-18
($’000)

2018-19
($’000)

2019-20
($’000)

2020-21
($’000)

2021-22
($’000)

Navigational infrastructure (Marine Navigation Levy)

Expenses (X)

31,874

35,567

37,164

41,294

36,996

Revenue (Y)*

34,651

36,539

36,281

38,146

43,556

Balance (Y - X)

2,777

972

(883)

(3,148)

6,560

Explain material variances:

In 2019-20 and 2020-21, provisions for removal of lead paint and asbestos content in aids to navigation sites (predominately lighthouses) were increased as further evidence and substantiation of its existence become known. The approximate movement in the provision for 2019-20 was $4.9 million and for 2020-21 was $6.3 million. We are working through each of the identified sites through a program of scheduled works to remediate sites and reduce this provision each year.

In 2021-22 a reversal of previously recognised lead paint and asbestos remediation work provision was recognised ($3.6 million).

Environmental marine protection (Protection of the Sea Levy)

Expenses (X)

30,219

62,707

29,686

25,311

26,719

Revenue (Y)*

36,494

39,234

48,156

49,773

38,501

Balance (Y - X)

6,275

(23,473)

18,470

24,462

11,782

Explain material variances:

There are natural timing variances associated with environmental emergencies, as clean-up operation costs are incurred immediately from date of an incident, whereas insurance recoveries or legal settlements are received up to four to six years afterwards.

As AMSA has a constructive obligation to meet clean-up costs from ship-sourced marine pollution, in 2018-19 we booked a $27.1 million provision associated with an incident that occurred in June 2018. This clean-up operation finished in June 2020, with actual expenditure of $15.7 million. The excess provision of $11.4 million was reversed and recognised as revenue in 2019-20.

In 2020-21 we received insurance recoveries and legal settlements from incidents that occurred in prior years.

Further, there was a reduction in crisis preparedness training expenditure and other National Plan related activities because of COVID-19 restrictions in 2020-21 and continuing into 2021-22.

Seafarer ship safety under Navigation Act 2012 and other Acts (Regulatory Functions Levy)

Expenses (X)

43,142

35,507

50,433

47,343

49,675

Revenue (Y)

52,488

53,470

54,949

56,724

57,835

Balance (Y - X)

9,346

17,963

4,516

9,381

8,160

Explain material variances:

For 2017-18 to 2018-19 there was a redirection of resources towards the domestic commercial sector due to unexpected level of transitional workloads associated with full-service delivery of the National System, with 2019-20 reverting back to normal services.

However, in 2020-21 and partially continuing into 2021-22 there was a reduction in expenditure predominately related to COVID-19 disruptions and delays for regulatory function activities. We expect this to reverse (increase in expenditure) from 2022-23 as pandemic disruptions largely decrease and work-force strategy planning is undertaken to identify efficient and effective usage of resources in provision of regulatory functions across both domestic and international sector.

Marine services under Navigation Act 2012 and ship registration

Expenses (X)

5,560

5,995

10,897

9,000

9,134

Revenue (Y)

3,959

3,813

2,959

2,930

2,853

Balance (Y - X)

(1,601)

(2,182)

(7,938)

(6,070)

(8,160)

Explain material variances:

An analysis of these under-recoveries indicates that it is largely within qualifications for seafarers and pilots, and inspections and surveys on international vessels. We are reviewing processes to determine whether costs are efficient or not. Depending on results of this analysis, we will work with stakeholders and government to consider appropriate future arrangements.

Marine services for National System

Expenses (X)

867

6,359

7,256

7,772

7,849

Revenue (Y)

119

3,360

2,988

3,098

3,325

Balance (Y - X)

(748)

(2,999)

(4,268)

(4,674)

(4,524)

Explain material variances:

There are three components driving under-recovery, lower volumes (and revenue) than was originally anticipated, an increase in the level of service delivery, and temporary and ongoing inefficiencies as business processes are developed and refined after full-service delivery in 2018-19. The reduction in revenue for 2019-20 and 2020-21 is largely the result of bushfire and COVID-19 relief provided to industries.

2017-18

($’000)

2018-19

($’000)

2019-20

($’000)

2020-21

($’000)

2021-22

($’000)

Expenses (X)

111,662

146,135

135,436

130,720

130,373

Revenue (Y)

127,711

136,416

145,333

150,671

146,070

Balance (Y - X)

16,049

(9,719)

9,897

19,951

15,697

Cumulative

16,049

6,330

16,227

36,178

51,875