ACT Forests
Objectives
ACT Forests manages 24,350 hectares of land, including 5,150 hectares of established pine plantation, and is playing a key role in delivering the Government’s re-greening program in the Cotter catchment and areas close to the urban interface.
The major management priorities for ACT Forests after the bushfires are reforestation, protection of water quality, fire protection and maintenance of the forest estate and recreation facilities.  Minor commercial operations will continue in Kowen plantation.  The objective of the operational programs is to progressively implement the reforestation program in a holistic manner that addresses the significant environmental issues and ensures that the new forests surpass those that were destroyed by the fire. 
The forests continue to provide a diverse range of recreational and educational opportunities for the community, particularly in the Kowen plantation.
2005-06 Highlights
Strategic and operational issues to be pursued in 2005‑06 include:
•	continuing the cleanup of over 10,000 hectares of burnt softwood plantation - achieving another 1,500 hectares of that program;
•	planting 1.3 million pine trees and 360,000 other native and exotic plants including the planting of Stromlo Forest Park;
•	continuing a major forest road rehabilitation program focusing on works within the Cotter Catchment; and
•	maintaining ACT Forests’ base contribution to bushfire prevention and suppression programs.

Output Classes
	Total Cost	Government Payment for Outputs	
	2004-05
Est. Outcome
$’000	2005-06
Budget
$’000	2004-05
Est. Outcome
$’000	2005-06
Budget
$’000	
Output Class 1
Forestry Services	12  260	12  323	133	193	
Output 1.1:  Rehabilitation and Management of Forest Estate	12  260	12  323	133	193	
					
The major management priorities for ACT Forests after the January 2003 bushfires are cleanup and rehabilitation of areas close to the urban interface and within the Cotter catchment.  Minor commercial operations will continue in Kowen Forest.
Strategic Indicators 
Strategic Indicator 1
Rehabilitation of the Forest Estate

	2004‑05
Target	2004-05
Est. Outcome	2005-06
Target	
	hectares	hectares	hectares	
Rehabilitation of the Forest Estate	N/A	N/A	1  550	

This measure reflects the completion of debris removal, site preparation and replanting of areas affected by the January 2003 bushfires.  The long term target excludes areas of former pine plantation which are being reserved for future urban expansion or being converted to major facilities such as Stromlo Forest Park and the International Arboretum.

Accountability Indicators
	2004‑05
Targets	2004-05
Est. Outcome	2005-06
Targets	
Output 1.1 Rehabilitation and management of forest estate	
a.	Total cost per hectare of pine planted	n/a	n/a	$2  850	
b.	Total annual management cost per hectare – excluding cost of harvesting operations	n/a	n/a	$110	
c.	Percentage of planned planting program completed	n/a	n/a	100%	
d.	Survival of previous years’ pine planting	85%	53%	0%1	

1.	No pine planing in 2004 due to continuing drought, target will be used to measure survival rate in coming years.

Budgeted Financial Results
Section 31 of the Financial Management Act 1996 (FMA), provides that Chief Executives are responsible for the achievement of financial results.  For the purpose of Section 31 of the FMA key budgeted results are specified in the Budget Papers to improve accountability.  An outcome of the increased accountability will be the requirement for Chief Executives to explain material variances from specified budgeted results.
In accordance with Section 31 of the FMA, the following are the key 2005‑06 Budget results for ACT Forests:
•	Operating Result ($8.724m deficit) – this measure focuses on the financial performance of ACT Forests, and will measure its success in managing expenditure levels within government funding and commercial revenues.  This result is driven by expenses incurred in the rehabilitation of the forest estate.
•	Current Ratio (0.3 to 1) – the current ratio is an indication of the ability to fund short term liabilities from short-term assets.  While a generally accepted minimum of 1:1 is desired, a ratio of 0.3:1 is considered acceptable.
•	Total Assets ($83.782m) – this measure focuses on ACT Forests’ ability to manage its asset base.
•	Total Liabilities ($14.731m) – this measure indicates the size of the obligations that ACT Forests has to meet in the future, and is largely comprised of payables related to the rehabilitation of the forest estate and deferred income tax liabilities.

Changes to Appropriation
Changes to Appropriation - Departmental						
 	2004-05	2005-06	2006-07	2007-08	2008-09	
Government Payment for Outputs	Est. Outc.	Budget	Estimate	Estimate	Estimate	
 	$'000	$'000	$'000	$'000	$'000	
						
2004-05 Budget	    74	    129	    162	    166	    166	
						
2nd Appropriation						
Wage Negotiations	    59	    64	    77	    80	    80	
2005-06 Budget Technical Adjustments						
Revised Indexation Parameters	    0	    0	    0	    0	    4	
						
2005-06 Budget 	    133	    193	    239	    246	    250	

ACT Forests	
Operating Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		Income								
		Revenue								
74		Government Payment for Outputs	133	193	45	239	246	250		
1  268		User Charges - Non ACT Government	1  795	1  268	-29	1  268	1  268	1  300		
2  138		User Charges - ACT Government	2  145	2  138	..	2  138	2  138	2  138		
0		Interest	78	0	-100	0	0	0		
0		Other Revenue	9	0	-100	0	0	0		
3  480		Total Revenue	4  160	3  599	-13	3  645	3  652	3  688		
		Gains								
0		Total Gains	0	0	-	0	0	0		
3  480		Total Income	4  160	3  599	-13	3  645	3  652	3  688		
		Expenses								
2  563		Employee Expenses	2  580	2  751	7	2  866	2  962	3  004		
225		Superannuation Expenses	226	248	10	263	272	272		
8  456		Supplies and Services	8  456	8  268	-2	8  234	6  318	6  477		
319		Depreciation and Amortisation	176	349	98	362	374	374		
662		Cost of Goods Sold	794	679	-14	696	714	732		
28		Other Expenses	28	28	-	28	28	29		
12  253		Total Ordinary Expenses	12  260	12  323	1	12  449	10  668	10  888		
-8  773		Operating Result From Ordinary Activities	-8  100	-8  724	-8	-8  804	-7  016	-7  200		
0		Income Tax Equivalent	-2  746	0	-100	0	0	0		
-8  773		Operating Result	-5  354	-8  724	-63	-8  804	-7  016	-7  200		

ACT Forests	
Balance Sheet	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
		Current Assets								
1  452		Cash	1  711	1  833	7	1  634	1  298	781		
33  554		Receivables	2  902	739	-75	739	739	739		
500		Other	500	500	-	500	500	500		
35  506		Total Current Assets	5  113	3  072	-40	2  873	2  537	2  020		
		Non Current Assets								
0		Receivables	34  960	27  415	-22	18  721	11  965	5  209		
19  414		Property, Plant and Equipment	21  549	22  470	4	22  608	22  734	22  860		
515		Capital Works in Progress	0	0	-	0	0	0		
33  597		Other	30  825	30  825	-	30  825	30  825	30  825		
53  526		Total Non Current Assets	87  334	80  710	-8	72  154	65  524	58  894		
89  032		TOTAL ASSETS	92  447	83  782	-9	75  027	68  061	60  914		
		Current Liabilities								
1  201		Payables	5  928	5  928	-	5  928	5  928	5  928		
231		Employee Benefits	350	355	1	355	354	355		
0		Income Tax Payable	4  097	4  097	-	4  097	4  097	4  097		
1  432		Total Current Liabilities	10  375	10  380	..	10  380	10  379	10  380		
		Non Current Liabilities								
228		Employee Benefits	200	254	27	303	354	406		
0		Non Current Income Tax Payable	4  097	4  097	-	4  097	4  097	4  097		
228		Total Non Current Liabilities	4  297	4  351	1	4  400	4  451	4  503		
1  660		TOTAL LIABILITIES	14  672	14  731	..	14  780	14  830	14  883		
87  372		NET ASSETS	77  775	69  051	-11	60  247	53  231	46  031		
		REPRESENTED BY FUNDS EMPLOYED								
83  631		Accumulated Funds	74  034	65  310	-12	56  506	49  490	42  290		
3  741		Reserves	3  741	3  741	-	3  741	3  741	3  741		
87  372		TOTAL FUNDS EMPLOYED	77  775	69  051	-11	60  247	53  231	46  031		

ACT Forests	
Cash Flow Statement	
  2004-05			  2004-05	   2005-06		  2006-07	  2007-08	  2008-09		
    Budget			Est.Outcome	   Budget	   Var	  Estimate	   Estimate	  Estimate		
    $'000			   $'000	   $'000	    %	   $'000	    $'000	   $'000		
		CASH FLOWS FROM OPERATING ACTIVITIES								
		Receipts								
74		Cash from Government for Outputs	133	193	45	239	246	250		
3  406		User Charges	4  105	3  406	-17	3  406	3  406	3  438		
0		Interest Received	82	0	-100	0	0	0		
9  540		Other Revenue	13  106	9  208	-30	8  694	6  756	6  756		
500		Extraordinary Receipts	0	500	#	0	0	0		
13  520		Operating Receipts	17  426	13  307	-24	12  339	10  408	10  444		
		Payments								
2  731		Related to Employees	2  862	2  940	3	3  080	3  184	3  223		
8  456		Related to Supplies and Services	9  348	8  268	-12	8  234	6  318	6  477		
690		Other	1  978	707	-64	724	742	761		
11  877		Operating Payments	14  188	11  915	-16	12  038	10  244	10  461		
1  643		NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES	3  238	1  392	-57	301	164	-17		
		CASH FLOWS FROM INVESTING ACTIVITIES								
		Payments								
1  300		Purchase of Property, Plant and Equipment	5  794	1  270	-78	500	500	500		
1  300		Investing Payments	5  794	1  270	-78	500	500	500		
-1  300		NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES	-5  794	-1  270	78	-500	-500	-500		
343		NET INCREASE/(DECREASE) IN CASH HELD	-2  556	122	105	-199	-336	-517		
1  109		CASH AT BEGINNING OF REPORTING PERIOD	4  267	1  711	-60	1  833	1  634	1  298		
1  452		CASH AT THE END OF THE REPORTING PERIOD	1  711	1  833	7	1  634	1  298	781		

ACT Forests	
Statement of Changes in Equity	
    Budget			Est.Outcome	   Planned		   Planned	   Planned	   Planned		
as at 30/6/05			as at 30/6/05	as at 30/6/06	   Var	as at 30/6/07	as at 30/6/08	as at 30/6/09		
   $'000			   $'000	    $'000	    %	    $'000	    $'000	    $'000		
96  145		Opening Balance	83  129	77  775	-6	69  051	60  247	53  231		
		Accumulated Funds								
-8  773		Operating Result for the Period	-5  354	-8  724	-63	-8  804	-7  016	-7  200		
		Reserves								
-8  773		Total Income And Expense For The Period	-5  354	-8  724	-63	-8  804	-7  016	-7  200		
		Transactions Involving Equity Holders Affecting Accumulated Funds								
87  372		Closing Balance	77  775	69  051	-11	60  247	53  231	46  031		
Notes to the Budget Statements
The result of the January 2003 bushfires was a shift in primary focus from commercial forestry to rehabilitation of non‑urban land and delivery of key reinstatement projects.  The rehabilitation program has been designed according to the needs of the land and, as such, the cost of the rehabilitation works varies from year to year.
Operating Statement
Significant variations are as follows:
•	government payment for outputs:  the increase of $0.059m in the 2004‑05 estimated outcome from the original budget and the increase of $0.060m in the 2005‑06 Budget from the 2004‑05 estimated outcome relates to supplementation for wage increases;
•	user charges – non ACT Government:  the increase of $0.527m in the 2004‑05 estimated outcome from the original budget relates to additional salvaged log sales and increased sawlog yields from the current harvesting operations at Kowen Forest.  The decrease of $0.527m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects a return to regular levels of log sales;
•	interest:  the increase of $0.078m in the 2004‑05 estimated outcome from the original budget relates to investment of short term cash surpluses.  The decrease of $0.078m in the 2005-06 Budget from the 2004‑05 estimated outcome reflects a forecast return to minimal cash surpluses;
•	employee expenses:  the increase of $0.171m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to the outcome of the Enterprise Bargaining Agreement (EBA);
•	depreciation:  the decrease of $0.143m in the 2004‑05 estimated outcome from the original budget relates to the delayed completion of the new ACT Forests headquarters, forest road reconstructions and forest fence replacement.  The increase of $0.173m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects revised levels of depreciation incorporating the completion of the above works;
•	cost of goods sold:  the increase of $0.132m in the 2004‑05 estimated outcome from the original budget relates to additional salvaged log and increased sawlog harvesting from the Kowen Forest.  The decrease of $0.115m in the 2005‑06 Budget from the 2004‑05 estimated outcome reflects a forecast return to regular levels of log harvesting; and
•	income tax equivalent:  the decrease of $2.746m in the 2004‑05 estimated outcome from the original budget is due to a write-back of a provision for deferred income tax expense based on recent forecasts.
Balance Sheet
Significant variations are as follows:
•	current receivables:  the decrease of $30.652m in the 2004‑05 estimated outcome from the original budget and the decrease of $2.163m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to the reallocation of insurance claim proceeds from current to non current assets to reflect the current program of insurance recoveries and associated works;
•	non current receivables:  the increase of $34.960m in the 2004‑05 estimated outcome from the original budget is due to the reallocation of insurance recoveries noted above.  The decrease of $7.545m in the 2005‑06 Budget from the 2004‑05 estimated outcome is due to insurance recovery draw‑downs in 2005‑06; and
•	current and non current employee entitlements:  the net increase of $0.091m in the 2004‑05 estimated outcome from the original budget and increase of $0.059m in the 2005‑06 Budget from the 2004‑05 estimated outcome relates to the effect of wage increases.