For the 2019-20 financial year, the Authority will be fully funded from Government grants to support the initial establishment of the Authority.
Ongoing financial sustainability will be achieved through an administration charge to the Scheme. Employers and eligible workers will not be required to pay a separate amount other than their levy rate contribution. The levy rate is necessary to ensure the sustainability of the Scheme as the liability for long service leave increases and accumulates over time.
Key financial assumptions
The 2019-20 Statement of Financial Performance budget is based on the following assumptions:
- The levy rates set at 1.65% for the Community Services sector, 1.80% for the Contract Cleaning sector and 1.80% for the Security sector are maintained for the full financial year.
- There are no revenue transfers within the portfolio on a $ per worker basis for operational expenses within the operating account during the 2019-20 financial year.
- CPI increase per year.
- Costs are based on known contractual amounts where available but have been estimated using best available information for forecast costs.
Summary Financial Performance for 2019-20
Overall the Authority is budgeting a neutral result for the 2019-20 financial year. One of the objectives of the Authority in the first year of operations is to register as many eligible employers into the Scheme as possible. This will ensure that levy contributions flow into the Scheme to support the long service leave liability of registered workers.
The 5-year revenue and expense budget outlook is as follows:
|Revenue ($)|| |
|Expenses ($)||301|| |
|Net result ($)|| |
|No. of workers||75,000||88,268||115,247||156,094||164,459|
|Cost per worker ($)||-||51.88||53.15||40.17||38.75|
1 The projected surplus result for the 2019-20 financial year represents unspent amounts from government’s initial contribution to establish the Authority and will be used to provide offset funding in the first two years of Scheme operations until the Authority becomes financially independent.
The financial performance of the Authority as well as the Scheme assets of the Authority are also subject to annual audits by the Victorian Auditor General’s Office.
Reviewed 18 February 2020