Portfolio overview

The Infrastructure, Transport, Regional Development, Communications and the Arts portfolio covers a number of policy areas, including safety across the civil aviation, maritime and transport sectors; air navigation services; developing and administering the national capital; road, rail and freight transport systems; communication services; digital technologies; and public access to the arts and culture.

The Department of Infrastructure, Transport, Regional Development, Communications and the Arts is the lead entity in the portfolio and supports the Australian Government’s policies on cities, regions and connecting Australians, and also supports Australian’s access to communication services, creative experiences and culture. Further information is available from the department’s website.

In addition to the department, there are 30 entities within the portfolio with responsibility for matters such as maritime, transport and civil aviation safety; infrastructure planning and delivery, including development of the Western Sydney Airport, national broadband network infrastructure and Inland Rail project; postal services; public broadcasting; access to cultural activities and the arts; national archives and strategic planning for the national capital.

On 1 July 2022 an Administrative Arrangements Order took effect which changed some of the responsibilities of the Infrastructure, Transport, Regional Development, Communications and the Arts portfolio, (formerly the Infrastructure, Transport, Regional Development and Communications portfolio). The total expenses and average staffing level by entity for Infrastructure, Transport, Regional Development, Communications and the Arts portfolio will be updated in this overview following the Budget, expected in the third quarter of 2022, which will reflect these changes.

Audit focus

In determining the 2022–23 audit work program, the ANAO considers prior-year audit and other review findings and what these indicate about portfolio risks and areas for improvement. The ANAO also considers emerging risks from new investments, reforms or changes in the operating environment.

The primary risks identified for the portfolio relate to: the need for effective oversight of the 30 highly diverse companies and other entities; and the department undertaking procurement and grants activities so as to achieve desired outcomes in a manner consistent with the relevant rule frameworks in order to ensure that the resources allocated achieve the outcomes that the government is seeking.

Specific risks in the portfolio relate to governance, grants administration, regulation, asset management and sustainment and financial management.

Governance

Government outcomes in this portfolio are largely delivered through corporate Commonwealth entities and government business enterprises established to operate under commercial principles. This creates a need to have in place a range of governance and oversight mechanisms to: provide assurance that outcomes are being delivered and being delivered in a proper way; and to ensure transparency of public policy related expenditure decisions.

NBN Co Limited is transitioning from building to operating the national broadband network. This transition requires clarity and coherence in governance structures and change management processes, particularly given the scale and distribution of NBN Co staff and infrastructure, together with the decentralised nature of operations.

Some entities in the portfolio are responsible for the elements of administration and governance in the Australian territories. Audits have previously drawn attention to comprehensive governance arrangements being essential to facilitate whole-of-government strategic oversight, continuity of service delivery and effective risk management.

It is important for entities to have effective risk management practices for cyber security. This includes conducting assessments of the effectiveness of security controls, security awareness training, and adopting a risk-based approach to prioritise improvements to cyber security. Weaknesses in the implementation and operation of governance and monitoring processes relating to cyber security increase the risk of unauthorised access to systems and data held by entities.

Grants administration

The portfolio administers significant amounts of grant funding, mainly in areas such as regional development, local government, infrastructure and the arts. The Department of Infrastructure, Transport, Regional Development, Communications and the Arts predominantly manages these grants through the Department of Industry, Science, Energy and Resources’ grants hub. Outsourcing the administration and processing of grants presents risks relating to assurance of quality, compliance and accountability, particularly when the arrangement being outsourced is small compared to the broader business of the delivery entity.

  • Audit activity has highlighted risks where assessment of grant applications does not verify the claims of applicants or ensure the assessment criteria are applied in full. It has also highlighted the importance of clear funding recommendations that are consistent with the results of the assessment work being provided to decision-makers.

Some entities in the portfolio have been involved in the design and delivery of grant programs to provide industry-specific funding and support (such as for the aviation and the creative arts sectors) in response to the impacts of COVID-19. The rapid implementation of these programs could increase risks associated with the effectiveness of the programs and administration of payments.

Regulation

A number of portfolio entities have regulatory responsibilities, predominantly in air, land and sea transport safety, as well as media and communications.

  • Audit work has highlighted risks in not ensuring an appropriate focus on organisational efficiency, including through the use of benchmarking with other entities to assess performance and identify opportunities for improvement.
  • Audit work has also identified that approaches to identifying risks have been inconsistent with risk management policies.

Asset management and sustainment

Australia’s $10.9 billion national collection is managed by a number of national cultural institutions within the portfolio. Previous audits have examined national cultural institutions and highlighted risks in strategic collections planning and acquisition, conservation and asset management, and financial management.

Financial management

The portfolio is exposed to risks regarding the transparency, consistency and appropriateness of the valuation of key assets. There are also challenges with valuations where there are significant non-commercial public policy elements of investment, such as with concessional loans.

Valuations often require a significant level of judgement to be applied by entities which influence the valuation outcome. The risks relating to valuations are increased for a number of reasons:

  • The valuation of administered investments are impacted by a higher degree of estimation uncertainty as they are primarily based on unobservable inputs.
  • The recognition of revenue for some portfolio entities, including a focus on the completeness and accuracy of revenue streams, such as customer access charges.
  • The importance of valuations in determining ongoing maintenance and sustainment investments required and the cost of future asset replacement.

Financial statements audits and other audit engagements

Overview

On 1 July 2022 an Administrative Arrangements Order (AAO) took effect which included changes to the responsibilities of the Infrastructure, Transport, Regional Development, Communications and the Arts portfolio, (formerly the Infrastructure, Transport, Regional Development and Communications portfolio). Entities which are now part of this portfolio are shown in Table 1. The risk profile for each entity is based on the 2021–22 financial statements which were prepared prior to the AAO on 1 July 2022 taking effect.

Table 1: Infrastructure, Transport, Regional Development, Communications and the Arts portfolio entities and risk profile

 

Type of entity

Risk of material misstatement

Number of higher risks

Number of moderate risks

Material entities 

Department of Infrastructure, Transport, Regional Development, Communications and the Arts

Non-corporate

Moderate

1

3

Airservices Australia

Corporate

Moderate

3

4

Australian Broadcasting Corporation

Corporate

Moderate

0

1

Australian Communications and Media Authority

Non-corporate

Low

1

0

Australian Postal Corporation

Corporate

Moderate

3

0

Australian Rail Track Corporation Limited

Company

High

4

2

National Archives of Australia

Non-corporate

Low

1

0

National Intermodal Corporation Limited

Company

High

1

4

National Capital Authority

Non-corporate

Low

0

2

National Gallery of Australia

Corporate

Moderate

1

1

National Library of Australia

Corporate

Low

1

0

NBN Co Limited

Company

High

5

0

WSA Co Limited

Company

Moderate

1

1

Non-material entities 

Australia Council

Corporate

Low

 

Australian Film, Television and Radio School

Corporate

Low

Australian Maritime Safety Authority

Corporate

Low

Australian National Maritime Museum

Corporate

Low

Australian Transport Safety Bureau

Non-corporate

Low

Bundanon Trust

Company

High

Civil Aviation Safety Authority

Corporate

Low

Creative Partnerships Australia Ltd

Company

Low

Infrastructure Australia

Corporate

Low

National Faster Rail Agency

Non-corporate

Low

National Film and Sound Archive of Australia

Corporate

Low

National Museum of Australia

Corporate

Low

National Portrait Gallery of Australia

Corporate

Low

National Transport Commission

Corporate

Low

Northern Australia Infrastructure Facility

Corporate

Moderate

Old Parliament House

Corporate

Low

Screen Australia

Corporate

Low

Special Broadcasting Service Corporation

Corporate

Low

Other audit engagements (including Auditor-General Act 1997 section 20 engagements)

Australia Post Services Pty Ltd – Australian financial services licence compliance

Australian Postal Corporation – half-year review

Australian Postal Corporation – performance standards

Australian Postal Corporation – key management personnel remuneration report – agreed-upon procedures

Australian Postal Corporation – highly paid staff remuneration report – agreed-upon procedures

Australian Rail Track Corporation – grant compliance audit

NBN Co Limited – half-year review

Norfolk Island Health and Residential Aged Care Service – financial statements audit

     

Material entities

Department of Infrastructure, Transport, Regional Development, Communications and the Arts

The Department of Infrastructure, Transport, Regional Development Communications and the Arts is responsible for improving infrastructure across Australia through funding coordination of transport and other infrastructure; providing an efficient, sustainable, competitive and safe transport system for all transport users; strengthening the sustainability, capacity and diversity of regional economies; providing advice on population policy; implementing the national policy on cities; and promoting an innovative and competitive communications sector. The department also promotes participation in and access to Australia’s arts and culture through developing and supporting cultural expression and supports governance arrangements in the Australian territories.

On 1 July 2022 an Administrative Arrangements Order (AAO) took effect which included changes to the responsibilities of the former Department of Infrastructure, Transport, Regional Development and Communications. The total budgeted financial statements by category for the new Department of Infrastructure, Transport, Regional Development, Communications and the Arts will be updated in this overview following the Budget, expected in the third quarter of 2022, which will reflect these changes.

Financial statements audit

There are four key risks for the former Department of Infrastructure, Transport, Regional Development and Communications 2021–22 financial statements that the ANAO has highlighted for specific audit coverage that the Department of Infrastructure, Transport, Regional Development, Communications and the Arts will have responsibility for from 2022–23. Two of these risks the ANAO considers potential key audit matters (KAMs).

  • The valuation of the Commonwealth’s investments in corporate Commonwealth entities and companies, particularly NBN Co, Australian Postal Corporation, Australian Rail Track Corporation, Western Sydney Airport Co Limited and Airservices Australia, due to the complexity and sensitivity of the judgements applied to key inputs in the valuation process (particularly forecast cash flows, growth and discount factors), the impact of changing economic conditions as a result of the COVID-19 pandemic on the valuation, and the significance of the investments balance to the financial statements. (KAM – Valuation of the administered investments)
  • The valuation of advances and loans (particularly the loan facility to NBN Co and the Northern Australia Infrastructure Facility), due to the judgements required in managing impairment and expected credit loss risks and when selecting the assumptions (particularly the selection of the market interest rate) used in the valuation models used for concessional loans. (KAM – Valuation of administered advances and loans)
  • The management of, and accounting for, the department’s grant programs, due to the value, scale and diversity of these programs and their mode of delivery. Complexity of these programs has increased given the department’s role in delivering economic stimulus in response to the COVID-19 pandemic (mainly in the form of grant payments).
  • The management of National Partnership payments, as the programs are complex and financially significant and subject to detailed legislative conditions, and a level of subjectivity and judgement are applied in determining whether a recipient meets eligibility and funding milestone requirements.

Airservices Australia

Airservices Australia is responsible for the provision of air navigation services across Australian and oceanic airspace, and the provision of aviation rescue firefighting services at major Australian airports. Supported by a national network of communications, surveillance and navigation facilities and infrastructure, Airservices Australia is funded through domestic charges levied on its customers and borrowings from debt markets. Airservices Australia received funding from government in 2020–21 and 2021–22 in lieu of charges from external customers to cover the reduction in revenues due to the COVID-19 related downturn in aviation traffic and to fund future operating expenses in 2021–22 and 2022–23.

Airservices Australia’s total actual revenues for 2020–21 were just under $1.5 billion, with 22 per cent of these revenues attributable to airways revenue, as shown in Figure 1. Assets under construction are attributable to 23 per cent of total assets, with property, plant and equipment attributable to almost 33 per cent.

Figure 1: Airservices Australia’s total actual financial statements by category ($’000)

 
 

Source: ANAO analysis of Airservices Australia’s 2020–21 annual report.

There are three higher risks for Airservices Australia’s 2021–22 financial statements.

  • The completeness and accuracy of airways revenue, given the complexity of the flight traffic data and dependence on multiple information technology (IT) systems when generating customer invoices.
  • The management of, and accounting for, assets under construction and existing, completed property, plant and equipment and intangibles. Capturing costs related to assets under construction and determining their appropriate treatment under relevant accounting standards is complex, due to the technical nature of those assets and the judgements involved in assessing whether costs can be capitalised. Valuation of completed asset infrastructure, which is a material balance, is sensitive to changes in the assumptions used in the valuation models.
  • The impact of activities undertaken by Airservices Australia in response to the new operating environment resulting from the COVID-19 pandemic, including going concern consideration and appropriate disclosure of impacts in the financial statements.

Australian Broadcasting Corporation

The Australian Broadcasting Corporation (ABC) is primarily responsible for providing innovative and comprehensive broadcasting and digital media services of a high standard that contribute to a sense of national identity, inform and entertain audiences, and foster the performing arts.

The ABC’s total budgeted assets for 2022–23 are just under $1.8 billion, with 36 per cent of these assets attributable to land and buildings, as shown in Figure 2.

Figure 2: Australian Broadcasting Corporation’s total budgeted financial statements by category ($’000)

 
 

Source: ANAO analysis of 29 March 2022–23 PBS.

The ABC’s key risk for its 2021–22 financial statements is the accuracy and valuation of land and buildings, as the valuations are sensitive to changes in the assumptions used in the valuation models and contain highly specialised components.

Australian Communications and Media Authority

The Australian Communications and Media Authority (ACMA) is responsible for the regulation of broadcasting, radio communications (spectrum management), telecommunications and online content.

ACMA’s total budgeted revenues for 2022–23 are just over $1.4 billion, with 87 per cent of these revenues attributable to other taxes, as shown in Figure 3.

Figure 3: Australian Communications and Media Authority’s total budgeted financial statements by category ($’000)

 
 

Source: ANAO analysis of 29 March 2022–23 PBS.

ACMA’s key risk for its 2021–22 financial statements relates to the accounting for licensing revenue. This involves the application of professional judgement in determining when to recognise revenue, as spectrum management is technically complex and involves licensing, auctions and trading. On 1 January 2021, the Regional Broadband Scheme came into effect and was established to ensure transparent and sustainable funding for essential broadband services, by NBN, to regional, rural and remote Australians. This involves a levy charge on all internet connections per month, collected by the network operator and remitted as part of an annual return to ACMA for assessment which commenced in October 2021 for the first time.

Australian Postal Corporation

The Australian Postal Corporation (Australia Post) is a government business enterprise responsible for supplying postal services to Australia, including the distribution of letters and parcels in Australia and internationally.

Australia Post’s total actual assets for 2020–21 are just under $7.1 billion, with 13 per cent of these attributable to the net superannuation asset, as shown in Figure 4.

Figure 4: Australian Postal Corporation’s total actual financial statements by category ($’000)

 
 

Source: ANAO analysis of Australia Post’s 2020–21 annual report.

There are three key risks for Australia Post’s 2021–22 financial statements that the ANAO has highlighted for specific audit coverage, all of which the ANAO considers potential key audit matters (KAMs).

  • The significant judgement required in estimating the amount of postage products sold which are still unused at balance sheet date. Revenue is recognised over time and requires an estimation of the expected timing and amount of future utilisation of those unused postage products. (KAM – Valuation of unearned revenue liability)
  • The complexity of the valuation of the Australia Post Superannuation Scheme. The valuation of the net superannuation asset is sensitive to movements in the long-term assumptions. Judgement is applied by management in relation to the selection of long-term assumptions such as salary growth, discount and inflation rates. (KAM – Valuation of the net superannuation asset)
  • The significant judgement applied in relation to the selection of assumptions such as the discount rate and cash flow forecasts supporting the valuation of goodwill. (KAM – Valuation of goodwill)

Australian Rail Track Corporation Limited

The Australian Rail Track Corporation (ARTC) is responsible for the development, maintenance, management and delivery of some of Australia’s major rail networks, including the national interstate rail network, the Hunter Valley coal rail network, and the construction of the Inland Rail network. In May 2017, the Australian Government announced it would invest substantial equity funding into ARTC for the company to deliver the Inland Rail network. A commitment of further equity funding to deliver the project was announced by the Australian Government in October 2020. Inland Rail is a 1,700-kilometre rail line that will link Brisbane and Melbourne through regional Australia.

ARTC’s total actual assets for 2020–21 were just under $4.4 billion, with 88 per cent of these assets attributable to property, plant and equipment, as shown in Figure 5. ARTC’s total actual revenue for 2020–21 was just over $888.7 million, with 86 per cent of this revenue attributable to rail access charges.

Figure 5: Australian Rail Track Corporation Limited’s total actual financial statements by category ($’000)

 
 

Source: ANAO analysis of Australian Rail Track Corporation’s 2020–21 annual report.

ARTC has six key risks for its 2021–22 financial statements.

  • The valuation of the Hunter Valley and interstate rail network assets. This is a material balance for ARTC, is sensitive to changes in the assumptions used in the valuation models adopted, and involves highly specialised components and forecasts.
  • The recognition of capital costs of expenditure on the Inland Rail network (under construction), given the scale of construction, complexity, and sensitivity of the judgments applied in the model used to determine impairment and capitalisation of these assets.
  • The taxation-related balances, as there is complexity and judgement involved in accounting for deferred tax balances.
  • The recognition of revenue for a number of income streams, as there are significant judgements exercised by management in estimating the amount of revenue to be recognised.
  • The estimation of the biodiversity offset provision due to the complexity in the calculation especially due to the limited market for the type of biodiversity credits required by ARTC.
  • The management of, and accounting for, grants, particularly recognition and calculation of deferred grant income, as this relies heavily on management’s assessments.

National Archives of Australia

The National Archives of Australia is an Australian Government entity established under the Archives Act 1983. It sets information and data management policy and standards for Australian Government entities to meet in creating, retaining, maintaining, securing, preserving, appropriately disposing of, and providing appropriate access to trusted government information and data. The National Archives collects records of government decisions and actions.

The National Archives’ total budgeted assets for 2022–23 are just over $2.0 billion, with heritage and cultural assets representing 75 per cent of the total budgeted assets, as shown in Figure 6.

Figure 6: National Archives of Australia’s total budgeted financial statements by category ($’000)

 
 

Source: ANAO analysis of 29 March 2022–23 PBS.

The key risk for the National Archives’ 2021–22 financial statements is the valuation of the national archival collection, due to its complex and unique nature.

National Intermodal Corporation Limited

The National Intermodal Corporation Limited (National Intermodal) was originally established to oversee the development and future operation of the Moorebank Logistics Park in Sydney’s south-west. Once completed, the Moorebank terminal will have an import and export facility with a direct link to Port Botany, and also an interstate and regional facility to connect to the national rail freight network. The terminal is being developed and operated by co-investor Sydney Intermodal Terminal Alliance.

In February 2022, National Intermodal was renamed and the company’s mandate was expanded to include the planning, delivery and operation of open access intermodal freight terminals in Melbourne and Brisbane in support of the Australian Government’s Inland Rail project with the objective of facilitating the development and operation of a modern and efficient freight network that improves productivity.

National Intermodal’s total actual liabilities for 2020–21 were just over $231.8 million, with 89 per cent of these liabilities attributable to provisions and lease liabilities, as shown in Figure 7. Total assets were just under $553.3 million, with 42 per cent attributable to equity accounted investments and 14 per cent attributable to deferred tax assets.

Figure 7: National Intermodal Company Limited’s total actual financial statements by category ($’000)

 
 

Source: ANAO analysis of National Intermodal Company Limited’s 2020–21 annual report.

There are key five risks for National Intermodal’s 2021–22 financial statements.

  • The valuation of provisions related to Moorebank Avenue works at the Moorebank Logistics Park, land remediation obligations and voluntary planning contributions, due to the judgements and estimates involved in capturing costs, including assessing the level of work required for the completion of these projects.
  • The valuation of the investment in Moorebank Precinct Land Trust, due to discounted cash flow valuation model which includes significant assumptions and estimates which determine the valuation.
  • The capitalisation and recoverability of assets under construction for Moorebank Logistics Park project works.
  • The valuation of National Intermodal’s deferred tax assets, due to judgements involved in the assessment of recoverability of deferred tax assets against future forecast profits, and judgements involved in the apportionment of deductible costs for the derivation of the valuation.
  • The consideration of management’s use of the going concern assumption in preparing the financial statements given the establishment of debt financing facilities during 2021–22 and the forecast cash flows required to complete the enabling project works at the Moorebank Logistics Park.
  • Our audit approach will also be responsive to any risks arising from the development of the Melbourne and Brisbane terminals as progress is made by National Intermodal C in planning and developing these terminals.

National Capital Authority

The National Capital Authority (NCA) performs the role of trustee and manager of areas in Canberra and the Australian Capital Territory (ACT) that are designated as National Land for the special purpose of Canberra as Australia’s National Capital. The NCA shapes the future of Canberra for all Australians through the National Capital Plan and related planning and development work. The NCA also manages much of the National Estate such as Lake Burley Griffin, the National Triangle and Anzac Parade and encourages citizens and visitors to explore Canberra’s unique characteristics and special role as the National Capital. The NCA’s total budgeted assets for 2022–23 are just under $1.1 billion, with 93 per cent of these assets attributable to land and buildings and property, plant and equipment, as shown in Figure 8.

Figure 8: National Capital Authority’s total budgeted financial statements by category ($’000)

 
 

Source: ANAO analysis of 29 March 2022–23 PBS.

There are two key risks for the NCA’s 2021–22 financial statements.

  • The valuation of land and buildings, which is a material balance and sensitive to changes in the assumptions used in the valuation models.
  • The financial reporting of the NCA’s construction activities, requiring judgement to determine the status of projects at the end of the financial year.

National Gallery of Australia

The National Gallery of Australia (the Gallery) is responsible for developing and maintaining a national collection of works of art to exhibit or to make available for others to exhibit, and making the most advantageous use of the national collection in the national interest.

The Gallery’s total budgeted assets for 2022–23 are $6.7 billion, with almost 92 per cent of these assets attributable to heritage and cultural assets and 7 per cent attributable to land and buildings (Figure 9).

Figure 9: National Gallery of Australia’s total budgeted financial statements by category ($’000)

 
 

Source: ANAO analysis of 29 March 2022–23 PBS.

There are two key risks for the Gallery’s 2021–22 financial statements.

  • The valuation of the heritage and cultural collection, which involves significant judgement and expertise due to the unique nature of these items.
  • The valuation of the Gallery building, as this is a special-purpose asset with a number of unique features and is of a restricted-use nature.

National Library of Australia

The National Library of Australia (NLA) is responsible for developing and maintaining a national collection of library material, including a comprehensive collection of material relating to Australia and the Australian people, and for making this material available to the public.

The NLA’s total budgeted assets for 2022–23 are just over $1.5 billion, with almost 72 per cent of these assets attributable to heritage and cultural assets, as shown in Figure 10.

Figure 10: National Library of Australia’s total budgeted financial statements by category ($’000)

 
 

Source: ANAO analysis of 29 March 2022–23 PBS

The NLA’s key risk for its 2021–22 financial statements is the valuation of the national collection, due to the materiality of the balance and the judgement required in selecting the assumptions used in determining the fair value of cultural and heritage assets.

NBN Co Limited

The primary objective of NBN Co Limited is to provide wholesale services to internet service providers. NBN Co is a government business enterprise incorporated under the Corporations Act 2001.

NBN Co’s total actual revenues for 2020–21 were $4.6 billion, with 96 per cent of these revenues attributable to telecommunications revenue, as shown in Figure 11. Property, plant and equipment and intangibles attributed to 98 per cent of total assets, with the associated depreciation and amortisation attributable to 42 per cent of total expenses.

Figure 11: NBN Co Limited’s total actual financial statements by category ($’000)

 
 

Source: ANAO analysis of NBN Co Limited’s 2020–21 annual report.

There are five key risks for NBN Co’s 2021–22 financial statements that the ANAO has highlighted for specific audit coverage, including three risks that the ANAO considers potential key audit matters (KAMs).

  • The management of, and accounting for, telecommunications revenue, which is increasing significantly as the network continues to roll out with business systems and controls that continue to evolve with scale. (KAM – accuracy and occurrence of telecommunications revenue).
  • Property, plant and equipment (including network assets) and intangible assets are the most significant balance in the financial statements, with the accounting for network assets subject to a high degree of judgement and complexity.
  • Estimation of useful lives and cost allocations in the depreciation and amortisation calculations for non-financial assets involves significant judgement and the use of complex manual depreciation models. (KAM – Accuracy and completeness of depreciation and amortisation expense).
  • The accounting for derivative financial instruments, due to the volume, quantum and complexity of the derivative arrangements entered into by NBN Co. Valuation of these derivative instruments remains complex due to the key assumptions involved in the calculation, including benchmark curves and credit adjustments. There are also complexities associated with financial statements disclosures around NBN Co’s derivatives. (KAM – valuation; presentation and disclosure of borrowings, related party borrowings and derivatives).
  • The management of, and accounting for, complex multi-year, high-value contractual and project management arrangements with multiple suppliers, including Telstra.

WSA Co Limited

WSA Co Limited was established to construct and operate Western Sydney International (Nancy-Bird Walton) Airport in Badgerys Creek, in south-western Sydney, to the functional specifications determined by the Australian Government. WSA Co Limited is a government business enterprise wholly owned by the Australian Government, represented by the Minister for Finance and the Minister for Communications, Urban Infrastructure, Cities and the Arts as shareholder ministers.

The Australian Government plans to invest up to $5.3 billion into WSA Co Limited to build Western Sydney Airport. This investment covers WSA Co Limited’s work on the earthworks and construction of the airport (runway and terminal infrastructure) in accordance with the conditions of the project deed agreed by the Australian Government and WSA Co Limited. WSA Co Limited’s total actual assets for 2020–21 were just over $612.2 million, with 66 per cent of these assets attributable to property, plant and equipment, as shown in Figure 12. 81 per cent of total actual expenses were attributable to site preparation costs and design and project management costs.

Figure 12: WSA Co Limited’s total actual financial statements by category ($’000)

 
 

Source: ANAO analysis of WSA Co Limited’s 2020–21 annual report.

There are two key risks for WSA Co Limited’s 2021–22 financial statements.

  • The recognition and measurement of capital expenditure that will be incurred in developing the airport, particularly the valuation of work in progress recognised during airport construction activities.
  • The effectiveness of policies and processes for procurement, particularly relating to management of contracts for the delivery and cost management of major earthworks and construction activities, given the material values of construction contracts and complexity of services delivered.

In progress audits

Performance audit (Report preparation)
Activity