Australian Competition and Consumer Commission
Section 1:  Overview, appropriations and budget measures summary
Overview
The Australian Competition and Consumer Commission (ACCC) is an independent statutory authority which administers the Trade Practices Act 1974 and the Prices Surveillance Act 1983 and performs functions under other Commonwealth legislation and State and Territory Competition Policy Reform Acts.
The ACCC seeks to maintain and improve competition and efficiency in markets, foster adherence to fair trading practices in well informed markets, promote competitive pricing wherever possible and restrain price rises in markets where competition is less than effective. It is especially concerned to foster a fair and competitive operating environment for small business.
The ACCC also collects administered revenue on behalf of the Government and this includes authorisation fees, fines and costs.
Appropriations
The total appropriations for the ACCC in the 2001‑02 Budget are $83.4 million (see Table 1.1 on the following page).

Part C:  Agency Budget Statements — ACCC

Australian Competition and Consumer Commission — appropriations 2001-02
Table 1.1:  Appropriations and other revenue

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(1)	C1 and E1 refer to information provided in Table 2.1. K1 refers to information provided in Table 3.1.
(2)	Under the appropriation structure, Bill No. 2 includes Specific Purpose Payments (SPP’s), New Agency Outcomes (NAO’s), administered capital and agency capital via agency injections and loans.
(3)	Refer to Table 3.1 for application of agency revenue.
(4)	Revenue from other sources includes other revenue from government (for example, resources free of charge) and revenue from other sources (for example, sales of goods and services by agencies). Non-appropriated agency and administered revenues are detailed in Appendix 1.
*	Percentage figures indicate the percentage contribution of revenue from government (agency appropriations) to the total price of outputs, by outcome.
Budget Measures — Australian Competition and Consumer Commission summary
Table 1.2:  Summary of measures in the 2001-02 Budget

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Part C:  Agency Budget Statements — ACCC

Administered capital and agency equity injections and loans
The ACCC does not have an appropriation for an equity injection or loan or an appropriation for administered capital in 2001-02.

Section 2:  Outcomes and outputs information
Outcomes and output groups
The map below shows the relationship between Government outcomes and the contributing outputs for the Australian Competition and Consumer Commission (ACCC). Financial detail for Outcome 1 by output appears in Table 2.1 while non‑financial information for Outcome 1 appears in Table 2.2.
Chart 6:  Outcomes and outputs groups

Outcome 1 — Description
To enhance social and economic welfare of the Australian community by fostering competitive, efficient, fair and informed Australian markets
The ACCC’s role is to administer the Trade Practices Act 1974 and the Prices Surveillance Act 1983 and performs functions under other Commonwealth legislation and State and Territory Competition Policy Reform Acts.
The ACCC seeks to maintain and improve competition and efficiency in markets, foster adherence to fair trading practices in well informed markets, promote competitive pricing wherever possible and restrain price rises in markets where competition is less than effective. It is especially concerned to foster a fair and competitive operating environment for small business.
In 2001‑02 additional resources have been provided to the ACCC for a pricing review of the ACCC.
Measures affecting Outcome 1
Pricing review of the Australian Competition and Consumer Commission
The Government will provide the Australian Competition and Consumer Commission with additional funding to maintain service delivery standards and to improve service delivery in priority areas such as e-commerce and rural and regional issues. 

Outcome 1 — Resourcing
Table 2.1 shows how the 2001-02 appropriations translate to total resourcing for Outcome 1.
Table 2.1:  Total resources for Outcome 1

(1)	C1 and E1 — see Table 1.1.

Outcome 1 — Contribution of outputs
Table 2.2:  Performance information for Outcome 1
Effectiveness — overall achievement of the outcome	
	Indicators	Measures	
Secure compliance by business with the Trade Practices Act (TPA).	Investigating complaints, developing and implementing compliance programmes, evaluating and reviewing applications for authorisations, access undertakings, monitoring them and arbitrating disputes. A small business focus which informs and educates small business about its rights and obligations under the TPA with a view to assisting in enforcing the TPA in relation to small business issues. A focus in the non‑traded goods and services sector to encourage competition in markets and consumer protection.	Meeting of prescribed time limits and standards, decisions based on relevant facts, effective public relations programme including media releases, publications, and liaison meetings.	
Secure improvement in market conduct.	Assisting with the development and implementation of regulatory frameworks which maximise the potential for promotion of competition and efficient outcomes including through access to essential facilities, liaising widely with key stakeholders, and reviewing price notifications from declared companies and monitoring prices as required under the Prices Surveillance Act.	Timely decisions resulting in improved access and service delivery and development of pro‑competitive regulatory frameworks. Publication of price notifications within statutory timeframes.	
Community informed about the TPA and the Prices Surveillance Act and their implications for business and consumers.	Information programmes, publications and publicity are used to promote general awareness of the Acts and the ACCC’s priorities and procedures. By these means also the deterrent and educational potential of the ACCC’s enforcement work is reinforced.	Level of community awareness and responsibility to be monitored; number of complaints, inquiries, attendance at seminars; and by community surveys.	

Table 2.2:  Performance information for Outcome 1 (continued)	
Performance information for administered items (including third party outputs)	
Output Group 1.1 — Australian Competition and Consumer Commission	
	Indicators	Measures	
Output 1.1.1 — The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws	Collection of Statutory fees and judgement debts.
	Timely banking and recording of Statutory fees and judgement debts.	
Performance information for agency outputs	
Output Group 1.1 — Australian Competition and Consumer Commission	
	Indicators	Measures	
Output 1.1.1 — The proper administration and enforcement of the Trade Practices Act 1974, the Prices Surveillance Act 1983 and related laws	Increasing resolution speed of arbitrations in telecommunications.	Increase the speed of finalising telecommunications arbitrations from 8 per year to 10 per year.	
	Reducing the number of outstanding regulatory decisions in telecommunications.	Reduce the number of outstanding access disputes from 15 to 5 over 2-year period.	
	Increasing number of telecommunications investigations.	Increase the number of telecommunications investigations from 10 to 15.	
	Reducing the number of outstanding regulatory decisions in gas.	Improved timeliness in delivery of decisions under National Gas Code — reduction in outstanding applications from 11 to 4 over 18 months.	
	Development and finalisation of regulatory guidelines in gas. 	Development of guidelines for exercise of regulatory responsibilities by end 2002.	
	Increasing resolution speed of arbitrations in gas.	Improved monitoring work — increase in speed of resolution of arbitrations under the National Gas Code from 3 to 6 over 18 month period.	
	Extending Commission small business communications programs to remote business and community organisations.	Expansion of satellite broadcast project to reach 150 remote communities by 2002-03.	
	Development of tailored compliance information tool kits for distribution to small business.	Development of compliance tools and information for small business for distribution by June 2002.
Production of information leaflets tailored to 4 key problem areas of small business by June 2002.	

Table 2.2:  Performance information for Outcome 1 (continued)	
Performance information for agency outputs (continued)	
	Indicators	Measures	
	Development and finalisation of regulatory guidelines in electricity.	Finalisation of regulatory principles guidelines for transmission networks by June 2002.	
	Reducing the number of outstanding regulatory decisions in electricity.	Finalisation of network ring fencing and accounting separation rules by December 2001.	
	Reducing the time taken to authorise national electricity market code changes.	Changes to national electricity code to incorporate move towards nodal pricing on transmission network by December 2001.
Reduction in outstanding authorisations from 60 to 20 by March 2002.	
	Extending Commission communications programmes to remote business and community organisations in rural and regional Australia.	Development of 400 partnerships with local agencies/Rural Transaction Centres by June 2002.
Establishment of Rural and Regional Advisory Committee by December 2001 to advise ACCC of competition and consumer issues and to assist ACCC in promoting its activities in remote locations. Meet quarterly.
Implementation of a regional visits programme.
Advertising of ACCC services in regional and rural press 4 times a year.	
	Reduction in number of irrelevant complaints.	Decrease percentage of irrelevant complaints from 53 per cent to 40 per cent by June 2003.	
	Development of domestic and international information exchange networks on e‑commerce.
	Establishment, by December 2001 of networks with international and domestic agencies to gain expertise in information/internet based conduct.
Development of internet specific strategy by March 2002 to improve the handling of potential competition and consumer protection issues by government agencies and encourage exchange of information on relevant e-commerce activities by December 2001.	

Table 2.2:  Performance information for Outcome 1 (continued)	
Performance information for agency outputs (continued)	
	Indicators	Measures	
	Establishment of an e-commerce investigatory capability.	Development of appropriate computer forensic capacity and relevant skills by December 2001.
Development of strategies to manage Commission’s capacity to respond quickly to emerging issues by December 2001.	
	Extending production of compliance information for the health and other professions sector.	Provision of cost effective information on ACCC in relevant sectors through a new publication by March 2002.	
	Undertake compliance/adjudication actions in the health and other professions sector.	Commencement of 2 additional compliance/adjudication actions by March 2002.	
Output 1.1.2 — Performance of actions that promote competition and fair trading and enable well functioning markets	The number of stakeholder visits.	Increase in number of stakeholder contacts from 10 to 50.	
	Increasing the level of awareness of ACCC and its role.	Increased awareness of the Trade Practices Act in the small business and other emerging markets sectors as measured by provision of an additional 5000 copies of compliance publications.
ACCC Consultative Committee to meet twice yearly.	
	Development of tailored compliance information tool kits for distribution to organisations in rural and regional Australia.	Extension of publications program- provision of 2 new publications to remote communities by March 2002.	

Evaluations
Stakeholder views will be sought on the effectiveness of the ACCC’s actions.
Competitive tendering and contracting
Some aspects of corporate services are already outsourced. Other aspects of corporate services, such as the library, and aspects of finance and personnel services will be market tested.

Section 3:  Budgeted financial statements
The budgeted financial statements will form the basis of the financial statements that will appear in the Australian Competition and Consumer Commission’s (ACCC) 2001‑02 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 abridged notes
The budgeted financial statements have been prepared in accordance with the Goods and Services Tax (GST) accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. 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 be reported gross. Appropriations are thus net of recoverable GST amounts.
Agency statements
Budgeted agency statement of financial performance
This statement provides a picture of the expected financial results for the ACCC by identifying full accrual expenses and revenues, which highlights whether the ACCC is operating at a sustainable level.
Budgeted agency statement of financial position 
This statement shows the financial position of the ACCC. It enables decision makers to track the management of the ACCC’s assets and liabilities.
Budgeted agency statement of cash flows 
This statement identifies expected cash flows from operating activities, investing activities and financing activities.
Agency non-financial assets — summary of movement
This statement shows the movement in the ACCC’s non‑financial assets over the Budget year 2001‑02.

Administered notes
Details of transactions administered by the agency on behalf of the Commonwealth are to be shown in the following notes to the financial statements.
Note of budgeted administered financial performance
This note identifies the main revenues and expenses administered on behalf of the Government. It also discloses administered revenues from government and transfers to the Public Account. 
Note of budgeted administered financial position
This note shows the assets and liabilities administered on behalf of the Government.
Note of budgeted administered cash flows
This note shows cash flows administered on behalf of the Government.

Table 3.1:  Budgeted agency statement of financial performance
for the period ended 30 June

(1)	K1 — see Table 1.1.

Table 3.2:  Budgeted agency statement of financial position
as at 30 June

Table 3.3:  Budgeted agency statement of cash flows
for the period ended 30 June

Part C:  Agency Budget Statements — ACCC

Table 3.5:  Agency non-financial assets — summary of movement (Budget year 2001-02)

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Table 3.6:  Statement of budgeted administered financial performance
for the period ended 30 June

Table 3.7:  Statement of budgeted administered financial position
as at 30 June

Table 3.8:  Statement of budgeted administered cash flows
for the period ended 30 June

Notes to the financial statements
Basis of accounting
The financial statements have been prepared on an accrual basis and are in accordance with the historical cost convention, except for certain assets which, are at valuation. Except where stated, no allowance is made for the effect of changing prices on the results or the financial position.
Agency and administered items
Agency assets, liabilities, revenues and expenses are those items that are controlled by the ACCC. They are used by the ACCC in producing its outputs, including:
•	computers, plant and equipment used in providing goods and services;
•	liabilities for employee entitlements;
•	revenues from appropriations or independent sources in payment of outputs; and
•	employee, supplier and depreciation expenses incurred in producing Commission outputs.
Administered items are those items which are controlled by the Government and managed or oversighted by the ACCC on behalf of the Government. These administered items managed or controlled by the ACCC include authorisation fees, fines and costs.
The purpose of the separation of agency and administered items is to enable the assessment of administrative efficiency of the agency in providing goods and services.
Revenues from government
Revenues from government are revenues relating to the core operating activities of the ACCC. Policies for accounting for revenue from government follow:
Agency appropriations
From 1 July 1999, the Commonwealth Budget has been prepared under an accruals framework.
Appropriations to the ACCC for its agency outputs are recognised as revenue to the extent they have been received into the ACCC’s bank account or are entitled to be received by the ACCC at year end.
Resources received free of charge
Services received free of charge are recognised in the statement of financial performance as revenue when and only when a fair value can be reliably determined and the services would have been purchased if they had not been donated. Use of those resources is recognised as an expense.
Other revenue
Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Administered revenue includes fines and costs, which are recognised as per the court judgement orders. Authorisation fees are recognised when the application is received.
Leases
A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets and operating leases under which the lessor effectively retains substantially all such risks and benefits.
Where a non-current asset is acquired by means of a finance lease, the asset is capitalised at the present value of minimum lease payments at the inception of the lease and a liability recognised for the same amount. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.
Operating lease payments are charged to the statement of operating performance on a basis which is representative of the pattern of benefits derived from the lease assets.
The ACCC entered into a sale and lease back of certain IT assets on 1 July 1999. This sale and lease back of the IT assets has been specifically treated as a finance lease. The consequent loss on sale of $0.8 million is being amortised over three years.
Receivables
Court costs, which are awarded, are not considered as receivables or as creditors, as the case may be, until the costs have been agreed by the concerned parties.
A provision is raised for any doubtful debts based on a review of the collectability of all outstanding accounts as at year end.
Bad debts are written off during the year in which they are identified.
Property, plant and equipment
Asset recognition threshold
Purchases of property, plant and equipment are recognised initially at cost in the statement of financial position, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are significant in total).
Revaluations
Schedule 2 requires that buildings, infrastructure, plant and equipment be revalued progressively in accordance with the ‘deprival’ method of valuation in successive 3 year cycles.
The ACCC revalued all its assets (except intangibles) on 1 July 1999. The current revaluation cycle commenced in 1999-2000.
The ACCC is implementing the requirements of Schedule 2 as follows:
•	leasehold improvements were revalued as at 1 July 1999 at depreciated replacement cost;
•	plant and equipment (including furniture and fittings, office equipment and computer equipment excluding software) assets, were revalued as at 1 July 1999 at deprival value;
•	intangibles (software) have not been revalued.
Depreciation and amortisation
Depreciable property, plant and equipment assets are written off to their estimated residual values over their estimated useful lives to the ACCC using, in all cases, the straight line method of depreciation. Leasehold improvements are amortised on a straight line basis over the lesser of the estimated life of the improvements or the unexpired period of the lease.
Depreciation/amortisation rates (useful lives) and methods are reviewed at each balance date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate. Residual values are re-estimated for a change in prices only when assets are revalued.

Depreciation and amortisation rates apply to each class of depreciable asset are as follows:
Asset class	Total useful life	
Fitout	Lesser of the term of the lease or 10 years	
Furniture and fittings	10 years	
Office equipment	5 years	
Computer hardware	3 years	
Computer software	3 to 7 years	

Appendix 1
Non-appropriation agency and administered revenue