The 2010–11 financial statements show an operating deficit of $1.043m. The deficit is due to the following factors:
In 2010–11, the ALRC’s budget was reduced by $0.242m with further reductions of $0.495m foreshadowed in forward years. In order to move to a position where the ALRC’s expenditure would align with its reduced appropriation, the ALRC took advantage of an opportunity to move its premises to a fully fitted-out office, sub-leasing from the Australian Government Solicitor (AGS). With a six-month lease incentive (until August 2011) and no fit-out or make-good obligations, this move also provided the opportunity for the ALRC to halve its rent going forward and to share a number of services with AGS. However, the ALRC would still have to carry the lease of its former premises until September 2012. The ALRC had hoped to sub-lease its former premises to reduce this onerous contract. However, as of June 2011, this has not eventuated. It is a requirement of the Australian Accounting Standards Board (AASB1044) to account for the total value of any onerous contract in the financial year in which it has occurred and this has contributed $786,386 (rent) and $109,842 (make-good) to this year’s operating deficit. Actual payment of this liability will be made over the next two years to September 2012.
The ALRC has also reduced its staffing levels from 19 FTE in 2010 to 15 FTE in 2011 and has made productivity savings—for example, by producing its consultation documents online as opposed to in hard copy and by sharing library resources with AGS. These savings will allow the ALRC to operate within its reduced appropriation for 2011–12.
The ALRC’s operating revenue of $3.285m is comprised of revenue from government of $3.152m, revenue from the sale of goods (publications) of $0.008m, interest of $0.066m, other revenue of $0.049m from AGD for Commissioner Flew and revenue of $0.010m from the sale of assets.
Total operating expenses of $4.328m were $0.747m greater than in 2009–10.
The ALRC’s depreciation and amortisation expense increased by $0.092m.
The ALRC’s total equity decreased by $1.293m due to the operating deficit.
The ALRC’s total assets decreased by $0.376m. This was due to the ALRC disposing of its hard copy library.
The ALRC’s total liabilities increased by $0.917m.
The ALRC has made significant productivity savings to assist it to align its expenditure to its reduced appropriation, including, only publishing its consultation documents online, instead of printing them in hard copy. In addition, the ALRC has reduced its administrative staffing complement and redefined the duties of certain corporate staff to realise productivity gains in this area of operations.