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 for 2010-11 was $466.5m, which is an increase of $33.6m over the previous year's total of $432.9m. The reasons for this variation are an increase of $4.9m in government and insurance contributions, a decrease in major incident funding of $2.8m, an increase in supplementary funding of $24.5m (attributable to funding received in relation to the 2009 Victorian Bushfires Royal Commission Outcomes and Valuing Volunteers), an increase in other income of $3.7m, an increase in Sales of Goods and Services of $0.8m, and an increase in interest income of $2.5m. The Comprehensive Operating Statement and note 2(e) disclose the movement in brigade cash and deposits over the financial period.

Government and statutory funding

CFA received contributions from Government and other sources amounting to $427.2m (2009-10 $400.6m). Under the Country Fire Authority Act 1958 (the Act), CFA receives funding of annual expenditure from the State Government (22.5%), insurance contributions (77.5%), and from other companies under Section 80A of the Act (which relates to property located in Victoria but insured offshore). The 2010- 11 statutory contributions of $427.2m, comprised $101.7m from the State Government (of which $20.9m was treated as contributed capital), $1.5m from the Commonwealth Government, $309.2m from insurance companies, and $14.7m from other companies.

Sales of goods and services

CFA received $14.5m during the year from the provision of goods and services to external bodies (2009-10 $13.7m). This includes the provision of external training services, fire protection fees, alarm monitoring, dangerous goods inspections, and charges for hazardous materials incidents.

Other income

Other income during the year totalled $17.8m from a number of sources including the Transport Accident Commission, public donations and recognition of additional brigade assets. Interest income for the year totalled $7.0m.

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Expenses

Total expenses for 2010-11 were $396.8m compared to $378.0m in 2009-10. This increase of $18.8m can be attributed mainly to increased staff numbers in delivery of community-related bushfire preparedness activities and programs to implement the recommendations of the Victorian Bushfires Royal Commission.

Employee benefits

During 2010-11, $188.5m (2009-10 $167.3m) 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 $889.3m (2009-10 $648.0m). This significant increase is due to the physical revaluation of land and buildings that occurred during 2010-11 in accordance with government requirements. Depreciation expense totalled $33.9m during 2010-11 (2009-10 $25.7m).

Borrowing costs

CFA incurred borrowing costs during 2010-11 of $0.2m (2009-10 $0.1m).

Other expenses

CFA spent $169.7m on general operating costs and other expenses during 2010-11. This was a decrease of $12.0m compared with the previous year which was mostly related to a relatively quieter fire season during 2010-11.

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