6. People and Relationships
This section describes a range of employment and post-employment benefits provided to our people and our relationships with other key people.
6.1 Employee Provisions
|Total employee provisions||37,642||45,001|
|Total employee provisions||3,661||3,477|
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination benefits expected to be wholly settled within twelve months of the end of the reporting period are measured at their nominal amounts.
Annual leave and long service lease provisions are classified as ‘other long term employee benefits’ under AASB 119 as they are not expected to be wholly settled within the next twelve months. Other long term employee benefits are measured as the present value of the expected cash flows.
The liability for employee benefits includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting.
The leave liabilities are calculated on the basis of employees' remuneration at the estimated salary rates that will be applied at the time the leave is taken, including the Department's employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.
The liability for long term benefits is determined using the short-hand method available under the FRR as at 30 June 2018. The estimate of the present value of the liability takes into account attrition rates and pay increases through promotion and inflation.
Separation and Redundancy
Provision is made for separation and redundancy benefit payments. The Department recognises a provision for termination when it has developed a detailed formal plan for the terminations and has informed those employees affected that it will carry out the terminations.
The Department's staff are members of the Commonwealth Superannuation Scheme (CSS), the Public Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or other superannuation funds held outside the Australian Government.
The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined contribution scheme.
The liability for defined benefits is recognised in the financial statements of the Australian Government and is settled by the Australian Government in due course. This liability is reported in the Department of Finance's administered schedules and notes.
The Department makes employer contributions to the employees' defined benefit superannuation schemes at rates determined by an actuary to be sufficient to meet the current cost to the Government. The Department accounts for the contributions as if they were contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June represents outstanding contributions for the final pay fortnight of the reporting period.
Accounting Judgements and Estimates
As the Department's staffing level was below 1,000 full time equivalents at 30 June 2018, the shorthand method outlined in the FRR was used to calculate long service leave provisions. Employee provisions for the previous year were calculated using specific probability and other factors recommended by the Australian Government Actuary.
6.2 Key Management Personnel Remuneration
Key management personnel (KMP) are those persons having authority for planning, directing and controlling the activities of the Department, directly or indirectly. The Department has determined KMP to be Portfolio Ministers1 and members of the Department's executive governance committee.
The Department established new governance arrangements during the 2017–18 financial year which changed the composition of KMP. KMP for the 2017–18 financial year were:
- members of the Secretary's Business Meeting for the period 1 July 2017 to 12 April 2018 comprising the Secretary, Deputy Secretaries and the Chief Operating Officer, and
- permanent members of the Department's Executive Board for the period 13 April 2018 to 30 June 2018 comprising the Secretary and Deputy Secretaries.
KMP in the 2016–17 financial year represented members of the Secretary's Business Meeting.
KMP remuneration is reported in the table below:
|Short-term employee benefits||1,585||1,478|
|Other long-term employee benefits||290||250|
|Total key management personnel remuneration expenses2||2,129||1,994|
The total number of KMP included in the above table are six (2017: five)3
- Remuneration reported in this note excludes the remuneration and other benefits of Portfolio Ministers. Portfolio Ministers' remuneration and other benefits are set by the Remuneration Tribunal and are not paid by the Department.
- Remuneration is reported on an accrual basis and excludes short-term acting arrangements.
- The Department had five KMP positions in 2018 (2017: four). The total number of KMP above includes employees occupying KMP positions for part of the year.
6.3 Related Party Disclosures
Related party relationships:
The Department is an Australian Government controlled entity. Related parties to the Department are key management personnel (see Note 6.2 above), other Australian Government entities and the Norfolk Island Health and Residential Aged Care Service (see Note 4.1D).
Transactions with related parties:
The following transactions with related parties occurred during the financial year and are considered to be significant due to their size and/or nature:
|Grants administration||Department of Industry, Innovation and Science||1.1B||11,681||-|
|Transfer of land and associated assets—Moorebank NSW||Department of Defence||4.2A||-||356,256|
|Revenue for airport site preparatory activities||WSA Co Ltd||2.2C||146,100||-|
|Fair value of leases1||Moorebank Intermodal Company Ltd||2.1E||-||356,256|
|WSA Co Ltd||2.1E||333,825||-|
|Equity payments||Moorebank Intermodal Company Ltd||4.1D||95,000||42,000|
|Australian Rail Track Corporation Ltd||4.1D||143,430||81,000|
|WSA Co Ltd||4.1D||275,730||-|
|Service Delivery Agreement||Norfolk Island Health and Residential Aged Care Service||2.1B||10,339||6,569|
- Land was leased to the Moorebank Intermodal Company Ltd in 2016–17 and WSA Co Ltd in 2017–18. Both leases required no or nominal consideration.
The Department enters into other transactions with Australian Government entities in the normal course of business that are not considered to be significant. Given the breadth of Government activities, related parties may transact with the government sector in the same capacity as ordinary citizens. These transactions have not been separately disclosed in this note.