Productivity Commission
Section 1:  Overview, Appropriations and Budget Measures Summary
Overview
The Productivity Commission (PC) is the Commonwealth Government’s principal review and advisory body on microeconomic policy and regulation. The Commission’s work covers all sectors of the economy. It extends to the public and private sectors and focuses on areas of Commonwealth as well as State and Territory responsibility.
As a review and advisory body the PC does not have responsibility for implementing government programmes. It carries out research, inquiry, advising and incidental functions prescribed under the Productivity Commission Act 1998.
The PC contributes to well informed policy decision making and public understanding on matters relating to Australia’s productivity and living standards, based on independent and transparent analysis from a community‑wide perspective. It does this by undertaking:
•	government‑commissioned projects;
•	performance reporting and other services to government bodies;
•	regulation review activities;
•	competitive neutrality complaints activities; and
•	supporting research and activities and statutory annual reporting.
Appropriations
The total appropriations for the PC in the 2000-01 Budget are $23.8 million (see Table 1.1 on the following page).

Productivity Commission — Appropriations 2000-01
Table 1.1:  Appropriations ($’000)
Outcomes	Agency (Price of Outputs)		Administered		
	Revenue from Government (Appropriations)	Revenue from Other Sources(a)	Price of Outputs		Annual Appropriations	Special Approps(b)	Total Administered Appropriations	Total Appropriations	
	Bill No. 1

	Special
Approps
	Total	

		Bill No. 1
	Bill No. 2
(SPPs & NAOs)	

		
		(A)		(B)	(C=A+B)	(D)	(E= C+D)		(F)	(G)	(H)	(I=F+G+H)	(J=C+I)	
Outcome 1 — Well‑informed policy decision-making and public understanding on matters relating to Australia’s productivity and living standards, based on independent and transparent analysis from a community-wide perspective	22,148	-	22,148	315	22,463		-	-	-	-	22,148	
Total	22,148	-	22,148	315	22,463		-	-	-	-	22,148	
Agency Capital (Equity Injections and Loans)		1,686	
Administered Capital		-	
Total Appropriations		23,834	
(a)	Revenue from Other Sources includes other revenue from Government (for example, resources free of charge) and revenue from sources other than Government (for example, sales of goods and services).

Administered Capital and Agency Capital (Equity Injections and Loans)
The PC will receive $1.686 million in unspent funding from 1998‑99 in the form of an equity injection in 2000-01.
Section 2:  Outcomes and Outputs Information
Outcomes and Output Groups
The following map shows the relationship between Government outcomes and the contributing outputs for the PC. Financial detail for Outcome 1 by output appears in Table 2.1 while non‑financial information for Outcome 1 appears in Table 2.2.

	Productivity Commission
Chairperson:  Mr Gary Banks		
							
	Overall Outcome
Strong, sustainable economic growth and the improved wellbeing of Australians		
							
	Outcome 1
Well-informed policy decision-making and public understanding on matters relating to Australia’s productivity and living standards, based on independent and transparent analysis from a community-wide perspective		
							
	Output Group 1.1
Productivity Commission
Total Price of Outputs:  $22.463 million
Agency Outcomes Appropriation:  $22.148 million		

Output 1.1.1
Government commissioned projects		Output 1.1.2
Performance reporting and other services to government bodies		Output 1.1.3
Regulation review activities		Output 1.1.4
Competitive neutrality complaints activities		Output 1.1.5
Supporting research and activities and statutory annual reporting	

Changes to Outcomes and Outputs
There are no proposed changes in outcomes or outputs since the previous year.
Outcome 1
Well-informed policy decision-making and public understanding on matters relating to Australia’s productivity and living standards, based on independent and transparent analysis from a community-wide perspective
Measures in the 2000-01 Budget
There are no measures for the Productivity Commission in the 2000‑01 Budget.
Outcome 1 — Resourcing
Table 2.1 shows how the 2000-01 appropriations relate to total resourcing for Outcome 1.
Table 2.1:  Total Resources for Outcome 1 
	Estimated Actual 	Budget
Estimate	
	1999-00
($’000)	2000-01
($’000)	
Agency appropriations
Output group 1.1 — Productivity Commission
Output 1.1.1 — Government commissioned projects
Output 1.1.2 — Performance reporting and other services to
	government
Output 1.1.3 — Regulation review activities
Output 1.1.4 — Competitive neutrality complaints activities
Output 1.1.5 — Supporting research and activities and
	statutory annual reporting	

11,300

3,100
2,700
200

5,308	

11,200

3,100
2,600
200

5,363	
Subtotal output group 1.1	22,608	22,463	
Total revenue from Government (appropriations)
contributing to price of agency outputs	21,662
96%	22,148
99%	
Total revenue from other sources	125	315	
Total price of agency outputs
(Total revenue from Government and from other sources)	
21,787	
22,463	
Total estimated resourcing for outcome 1
(Total price of outputs and administered expenses) (a)	
22,608	
22,463	

	1999-00	2000-01	
Average staffing levels (number)	205	200	
(a) Refer to Table 3.1 for further details on total price of outputs for 1999-2000.
Outcome 1 — Contribution of Outputs
The Productivity Commission’s five outputs derive from its statutory functions. The quantum and scope of the work under each output is largely determined externally (for example, government commissioned projects, regulation impact statement assessments, competitive neutrality complaints investigations). In view of this, the Commission requires the flexibility to vary resources amongst its various outputs.
The effectiveness with which the Commission’s outputs contribute to achievement of the outcome is difficult to assess and is often subjective. The Commission is but one source of policy advice on matters relating to Australia’s productivity and living standards and many issues are complex and long term. The Commission aims to demonstrate its effectiveness by reporting annually on the relevance, quality, timeliness and cost‑effectiveness of its outputs.
An elaboration of the activities covered by each of the outputs is as follows:
Output 1 (government commissioned projects) — public inquiries (for example, gambling, broadcasting), case studies (such as building industry work arrangements) and other commissioned work (such as environmental performance of buildings); 
Output 2 (performance reporting and other services to government) — Government Services and Government Trading Enterprise performance reports, as well as international benchmarking;
Output 3 (regulation review activities) — assessments of Regulation Impact Statements, a range of associated activities such as annual reporting, research, advice and education;
Output 4 (competitive neutrality complaints activities) — investigations of competitive neutrality complaints and associated activities such as research, advice and education; and
Output 5 (supporting research and activities and statutory annual reporting) — statutory annual reporting, research and working papers and associated activities such as submissions, conferences and speeches.

Performance Information for Outcome 1
Table 2.2:  Performance Information 2000-01	
Performance Information for Agency Outputs	
Output group 1.1 — Productivity Commission	
Output 1.1.1 — Government commissioned 	projects	Capacity to undertake projects to a cost of $11.2 million.
Projects of a high standard, useful to government, undertaken in accordance with required processes and on time.	
Output 1.1.2 — Performance reporting and other 	services to government	Capacity to provide reports and services to a cost of $3.1 million.
Reports of a high standard, useful to government and completed on time.	
Output 1.1.3 — Regulation review activities	Capacity to undertake Regulation Impact Statement assessments and associated activities to a cost of $2.6 million.
Regulation Impact Statement assessments and associated activities of a high standard, advice useful to government and on time.	
Output 1.1.4 — Competitive neutrality complaints 	activities	Capacity to undertake activities to a cost of $0.2 million.
Competitive Neutrality complaints successfully resolved within 90 days; associated activities of a high standard and useful to government.	
Output 1.1.5 — Supporting research and activities 	and statutory annual reporting	Capacity to undertake annual reporting, research projects and associated activities to a cost of $5.363 million.
Reports, projects and associated activities of a high standard, useful to government, raising community awareness and on time.	
Evaluations
Evaluation of actual levels of achievement will be shown in the PC’s 2000-01 Annual Report.
Competitive Tendering and Contracting
The PC’s outputs stem from its legislative functions. It uses periodic benchmarking and other means to monitor the cost effectiveness of its operations.

Section 3:  Budgeted Financial Statements
The budgeted financial statements will form the basis of the financial statements that will appear in the PC’s 2000‑01 Annual Report and form the basis for the input into the Whole of Government Accounts. The financial statements should be read in conjunction with the accompanying notes.
The financial statements are prepared consistent with GST accounting requirements, as outlined by the Urgent Issues Group (UIG) of the Australian Accounting Research Foundation. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable are reported gross. Appropriations are thus net of recoverable GST amounts.
Budget Statement of Revenues and Expenses (Budget Operating Statement)
This statement provides a picture of the expected financial results for the PC by identifying full accrual expenses and revenues, which highlights whether the PC is operating at a sustainable level.
Budget Statement of Assets and Liabilities (Budget Balance Sheet)
This statement shows the financial position of the PC. It enables decision makers to track the management of the PC’s assets and liabilities.
Budget Cash Flow Statement
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
Capital Budget Statement
This statement shows all proposed capital expenditure funded through the Budget as appropriations or from internal sources.
Non-financial Assets — Summary of Movement
This statement shows the movement in the PC’s non-financial assets over the Budget year 2000-01.
Table 3.1:  Agency Budget Statement of Revenues and Expenses
(for the period ended 30 June)
	Estimated Actual
1999-00
$’000	Budget Estimate
2000-01
$’000	Forward Estimate
2001-02
$’000	Forward Estimate
2002-03
$’000	Forward Estimate
2003-04
$’000	
Operating revenue						
Revenues from Government	21,662	22,148	22,158	22,229	22,268	
Sales of goods and services	60	208	215	223	230	
Interest	25	67	87	109	128	
Other	40	40	40	40	40	
Total operating revenues	21,787	22,463	22,500	22,601	22,666	
Operating expenses						
Employees	15,972	15,950	16,040	16,140	16,240	
Suppliers	5,900	5,747	5,694	5,721	5,753	
Depreciation and amortisation	736	766	766	740	673	
Total operating expenses	22,608	22,463	22,500	22,601	22,666	
Operating surplus or (deficit) before abnormal and extraordinary items	-821	-	-	-	-	
Operating surplus or (deficit) after abnormal and extraordinary items and CUC	-821	-	-	-	-	

Table 3.2:  Agency Budget Statement of Assets and Liabilities
(as at 30 June)
	Estimated Actual
1999-00
$’000	Budget Estimate
2000-01
$’000	Forward Estimate
2001-02
$’000	Forward Estimate
2002-03
$’000	Forward Estimate
2003-04
$’000	
Assets						
Financial assets						
Cash	167	2,717	3,500	4,334	5,093	
Receivables	1,598	15	15	15	15	
Prepayments	130	130	130	130	130	
Total financial assets	1,895	2,862	3,645	4,479	5,238	
Non-financial assets						
Land and buildings						
Infrastructure, plant and equipment	2,354	1,943	1,603	1,186	777	
Intangibles	253	160	67	-	-	
Total non-financial assets	2,607	2,103	1,670	1,186	777	
Total assets	4,502	4,965	5,315	5,665	6,015	
Liabilities						
Debt						
Leases	40	30	20	10	-	
Total debt	40	30	20	10	-	
Provisions and payables						
Employees	5,807	6,207	6,597	6,987	7,377	
Suppliers	180	129	99	69	39	
Total provisions and payables	5,987	6,336	6,696	7,056	7,416	
Total liabilities	6,027	6,366	6,716	7,066	7,416	
Equity						
Capital	1,562	1,686	1,686	1,686	1,686	
Reserves	96	96	96	96	96	
Accumulated surplus or deficit	-3,183	-3,183	-3,183	-3,183	-3,183	
Total equity	-1,525	-1,401	-1,401	-1,401	-1,401	
Current liabilities	3,078	3,097	3,137	3,177	3,217	
Non-current liabilities	2,949	3,269	3,579	3,889	4,199	
Current assets	1,895	2,862	3,645	4,479	5,238	
Non-current assets	2,607	2,103	1,670	1,186	777	

Table 3.3:  Agency Budget Cash Flow Statement
(for the period ended 30 June)
	Estimated Actual
1999-00
$’000	Budget Estimate
2000-01
$’000	Forward Estimate
2001-02
$’000	Forward Estimate
2002-03
$’000	Forward Estimate
2003-04
$’000	
Operating activities						
Cash received						
Appropriations for outputs	21,271	21,896	21,835	21,983	22,014	
Sales of goods and services	50	198	205	213	220	
Interest	25	67	87	109	128	
Total cash received	21,346	22,161	22,127	22,305	22,362	
Cash used						
Employees	15,301	15,550	15,650	15,750	15,850	
Suppliers	5,900	5,747	5,694	5,721	5,753	
Total cash used	21,201	21,297	21,344	21,471	21,603	
Net cash from operating activities	145	864	783	834	759	
Investing activities						
Cash received						
Proceeds from sales of property, plant and equipment	10	10	10	10	10	
Other	391	252	323	246	254	
Total cash received	401	262	333	256	264	
Cash used						
Purchase of property, plant and equipment	401	262	333	256	264	
Total cash used	401	262	333	256	264	
Net cash from investing activities						
Financing activities						
Cash received						
Other	-	1,686	-	-	-	
Total cash received	-	1,686	-	-	-	
Net cash from financing activities	-	1,686	-	-	-	
Net increase in cash held	145	2,550	783	834	759	
Cash at the beginning of the reporting period	22	167	2,717	3,500	4,334	
Cash at the end of the reporting period	167	2,717	3,500	4,334	5,093	

Table 3.4:  Agency Capital Budget Statement
(for the period ended 30 June)
	Estimated Actual
1999-00
$’000	Budget Estimate
2000-01
$’000	Forward Estimate
2001-02
$’000	Forward Estimate
2002-03
$’000	Forward Estimate
2003-04
$’000	
Purchase of non-funded current assets						
Funded by capital appropriations	-	-	-	-	-	
Funded internally from other resources	401	262	333	256	264	

Table 3.5:  Agency Non-financial Assets — Summary of Movement
	Land

$’000	Buildings

$’000	Total Land and Buildings

$’000	Other Infrastructure, Plant and Equipment
$’000	Total Infrastructure, Plant and Equipment
$’000	Intangibles

$’000	Total

$’000	
Gross value								
As at 1 July 2000 (opening)				5,407	5,407	466	5,873	
Additions	-	-	-	262	262	-	262	
Disposals	-	-	-	-387	-387	-	-387	
Other movements	-	-	-	-	-	-		
As at 30 June 2001 (closing)	-	-	-	5,282	5,282	466	5,748	
Accumulated depreciation	-	-	-	-	-	-		
As at 1 July 2000 (opening)	-	-	-	3,053	3,053	213	3,266	
Disposals	-	-	-	-387	-387	-	-387	
Charge for the reporting period	-	-	-	673	673	93	766	
Other movements	-	-	-					
As at 30 June 2001 (closing)	-	-	-	3,339	3,339	306	3,645	
Net book value as at 30 June 2001 (Closing book value)	-	-	-	1,943	1,943	160	2,103	
Net book value as at 1 July 2000 (Opening book value)	-	-	-	2,354	2,354	253	2,607	

Total additions
Self funded	-	-	-	262	262	-	262	
Appropriations	-	-	-	-	-	-	-	
Total	-	-	-	262	262	-	262	

Notes to the Financial Statements
Basis of Accounting
These financial statements have been prepared on a full accrual basis with the Commission being funded accordingly from 2000‑01 onwards.
The Budget Balance Sheet for 1999-2000 shows an amount carried forward from 1998‑99 as both a Receivable and a Capital injection. The amount of $1.686 million, including interest, will be received and banked in 2000‑01.
Non-financial assets consist mainly of Leasehold Improvements to the Commission’s leased accommodation and are being depreciated over the period of the leases. As no major capital expenditure is being proposed during the current estimating period through to year 2003‑04, the written down value is decreasing annually. Conversely the Commission’s financial assets are increasing through the funding of depreciation and will be available when required for future improvements.
Performance against Outcomes and Outputs
Performance information is included earlier under Table 2.2.