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Financial summary - Discussion and Analysis - Operating Statement

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Income

The following analysis refers to elements of the Financial Statements section of this Annual Report.

Total Income

Total income for the 2007-08 year was $303.9 million, which is a decrease of $19.6 million over the previous year's total of $323.5 million. The major reasons for this variation are an increase of $8.4 million in government and insurance contributions, and a decrease in other income of $31.7 million following the recognition of brigade cash and deposits for the first time in 2006-07 of $35.7 million. The Operating Statement for 2007-08 discloses the movement in brigade cash and deposits over the financial period.

Government and statutory funding

Under the CFA Act, CFA receives funding of annual expenditure through the Victorian State Government (22.5 per cent), insurance contributions (77.5 per cent), and from other companies under Section 80A of the CFA Act (which relates to property insured offshore). During 2007-08 statutory contributions totalled $268.6 million (2006-07: $260.2 million), comprising $58.5 million from the State Government (of which $3.2 million was treated as contributed capital), $215.0 million from insurance companies, and $9.2 million from other companies. In addition, $2.8 million was contributed by other government sources. Government contributions as a percentage of total revenue have decreased in 2007-08 due to a reduction in supplementary funding, as major fire incidents in 2007-08 were fewer compared with 2006-07.

Sales of goods and services

CFA received $13.3 million during the year from the provision of goods and services to external bodies (2006-07: $9.8 million). These include the provision of external training services, fire protection fees, alarm monitoring, dangerous goods inspections, and hazardous materials incidents. The main increase is due to the inclusion of the Fire Equipment Maintenance (FEM) business income.

Other income

Other income during the year totalled $22.0 million from a number of sources including the Transport Accident Commission, interest, public donations, the recognition of the value of additional brigade-owned vehicles, and a Commonwealth Government grant.

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Expenses

Total Expenses

Total expenses for the 2007-08 year were $281.7 million compared with $288.9 million for 2006-07. This decrease of $7.2 million can be attributed mainly to there being a significant reduction in major fires during 2007-08.

Employee benefits

During 2007-08 $136.7 million (2006-07: $133.0 million) was spent on salaries and other employee expenses such as superannuation, payroll tax, WorkCover premiums and employee support activities.

Depreciation and amortisation

The written down value of CFA's assets at cost or valuation, including land, buildings, leasehold improvements, vehicles, plant and machinery totalled $563.9 million (2006-07: $540.6 million). Depreciation expense was $22.8 million during 2007-08, which is consistent with the corresponding 2006-07 figure.

Borrowing costs

Due to CFA's level of liquidity this year, there were no borrowing costs during 2007-08.

Other expenses

CFA spent $122.2 million on general operating costs and other expenses during 2007-08. This was a decrease of $11.6 million over the previous year as described above.

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