Note 40: Defined benefit superannuation plans

Within the economic entity various Commonwealth entities sponsor defined benefit superannuation plans. The accrued benefits payable, net market value of plan assets available to pay benefits and vested benefits for each of these plans are as follows:

Note 40: Defined benefit superannuation plans (continued)

(a)Accrued benefits are measured at the present value of estimated future cash payments to employees arising from membership of the plan up to the reporting date (or, where stated, the date of the last accrual valuation).

(b)Vested Benefits are benefits which are not conditional upon continued membership of the plan (or any other factor other than resignation from the plan) and include benefits which members were entitled to receive had they terminated their plan membership as at the reporting date.

(c)See over for details of partially funded defined benefit superannuation schemes.


Note 40: Defined benefit superannuation plans (continued)

Partially funded defined benefit superannuation schemes:

The accrued benefits for the CSS, PSS and MSBS are comprised of a funded component, which will be met from the relevant plan's funds (that is, accumulated member contributions and, where applicable, productivity contributions, plus interest) and an unfunded component to be financed, by the Commonwealth, from the Consolidated Revenue Fund, at the time the superannuation benefits become payable. The funded and unfunded components for the accrued liabilities for these plans as at the date of valuation is as follows:

Unfunded defined benefit superannuation schemes:

The Commonwealth also guarantees the following unfunded defined benefit superannuation plans:

  • Defence Force Retirement and Death Benefits Scheme (DFRDB);
  • Defence Forces Retirement Benefits Scheme (DFRB); and
  • Parliamentary Contributory Superannuation Scheme (PCSS).

These plans have no assets to meet benefit payments. Instead, the plans are financed by the Commonwealth out of the Consolidated Revenue Fund at the time benefits become payable.

Further details on each plan can be found in the audited financial statements appended to the Annual Reports of the entities, which are tabled in the Parliament.

Note 41: Special Public Monies held outside the Official Public Account

Details pertaining to Special Public Monies, that is, monies that are not held on account of the Commonwealth or for the use or benefit of the Commonwealth, can be found in the audited financial reports of individual Commonwealth controlled entities.

Special Public Monies held outside the Official Public Account are held by the following Commonwealth controlled entities:

Note 42: Taxes collected on behalf of State and Territory Governments

Goods and Services Tax (GST)

In regard to GST revenue, AAS31 and other relevant accounting standards would suggest the gross amount of GST be included in the Commonwealth’s Financial Statements. However, the clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations is that the GST is a State tax collected by the Commonwealth in an agency capacity. Therefore, accrued GST revenues and associated payments to the States and Territories are not disclosed in these statements.

If the gross amount of GST had been reported in the Commonwealth’s Financial Statements, taxation revenue would be increased by $23,854 million, grant expenses and penalty remission expenses would be increased by $23,787 million and $3 million respectively and the operating result would be improved by $64 million. As such, consolidated net assets as at 30 June 2001 would be improved by $64 million.

The following table provides a condensed Statement of Financial Performance which shows the impact of including GST on the Commonwealth’s revenues and expenses:

Note 42: Taxes collected on behalf of State and Territory Governments (continued)

Revenue Replacement Payments

The Commonwealth, up to 30 June 2000, collected a number of revenue replacement taxes as an agent for the States and Territories. These taxes have replaced constitutionally invalid business franchise fees and are passed directly by the Commonwealth to the State and Territory Governments, with an adjustment for administration costs. Reflecting the Commonwealth's agency role in the collection of these taxes, they have not been recognised in these financial statements.

Note 43: Audit expenses

With the exception of a small number of entities, audit services within the reporting entity are provided by the AuditorGeneral. The cost of these services which include performance and financial statement audits, totalled $48million (19992000:$45million).

Note 44: Employee share schemes

Telstra Corporation Limited (Telstra) has five ownershipbased remuneration schemes. These are:

  • the Telstra Employee Share Ownership Plan (TESOP97);
  • the Telstra Employee Share Ownership Plan II (TESOP99);
  • Growthshare;
  • Directshare; and
  • Ownshare

A summary of key aspects of these plans are provided below. Full details of the plans can be found in the 200001 audited financial report of Telstra.

Note 44: Employee share schemes (continued)

(a)TESOP99 and TESOP97

The TESOP plans were an invitation to eligible employees to acquire shares in the company. The shares sold to eligible employees were ordinary share capital of Telstra.

Shares were offered to all eligible employees. For the TESOP97 scheme, this included employees who, on 20September1997, were employees of Telstra or one of its subsidiaries, but excluding certain parttime, fixed term, casual and contract employees, certain employees on leave without pay and those employees living outside Australia. The same eligibility criteria were applied for the TESOP99 scheme for eligible employees as at 27August1999.

Eligible employees were entitled to participate in both an initial share offer and an employee loyalty share offer. Under the initial offer, the Commonwealth guaranteed that each eligible employee would be able to purchase up to 2,000 shares (400 for TESOP99). For every four shares purchased under this offer, the eligible employee would receive one extra share free, up to a maximum of 500 extra shares (200 for TESOP99). Eligible employees could elect to purchase shares under the initial offer with their own funds, or use an interestfree loan provided by Telstra. Eligible employees who purchased shares in the public offer with their own funds were entitled to receive one loyalty share, at no additional cost, for every ten shares purchased in the public offer, to a maximum of 200 loyalty shares (a maximum of 80for TESOP99).

Further details can be found in the following tables.

(b)Telstra Growthshare Trust

Under the Growthshare Trust, Telstra operates the Growthshare, Directshare and Ownshare plans. The trustee is Telstra Growthshare Pty Ltd, a 100 per cent Telstra owned company. Under these plans, Telstra provides loans to the trustee to fund the allocation of shares.


The Growthshare plan, initiated in the 19992000 financial year, is a boarddetermined allocation of share options and restricted shares to selected executives as a part of the executives' reward scheme. The option or restricted share represents a right to acquire a share in Telstra.

Options or restricted shares may only be exercised once a performance hurdle is satisfied. The performance hurdle is that the average Telstra Accumulation Index must exceed the average All Industrials Accumulation Index for thirty consecutive days within a specified period. The specified period differs for the three separate offers under the Growthshare plan.

Note 44: Employee share schemes (continued)

Once the performance hurdle is met, options can be exercised, by paying the exercise price, at any time before the expiry date, at which time they will lapse.

The restricted shares can be exercised at any time after the performance hurdle is met, up until the expiry date, at which time the share will lapse. When exercised, they will be converted into restricted trust shares held by Telstra Growthshare Trust. They may be transferred to the executive at a cost of $1 in total for all shares the executive has been allocated.

Further details can be found in the following tables.


Under the Directshare plan, which began in the 2000-01 financial year, non-executive directors may be provided part of their fees in Telstra shares. Directors will receive 20per cent of their remuneration by way of directshares.

Shares under this plan are held in trust for a restriction period, being five years from date of allocation or until the director ceases to be a director or ceases employment with a company in the Telstra Group. The shares are then transferred to the participating director. The participating director is not able to trade in these shares until the transfer has taken place, but retains the beneficial interest (dividends, voting rights, bonuses and rights issues) during the restriction period.

Further details can be found in the following tables.


The Ownshare plan was initiated in the 2000-01 financial year. Under the plan, certain eligible employees may indicate a preference to acquire Telstra shares as part of their remuneration.

Shares allocated under the plan are held in trust for a restriction period of three to five years (as elected by the eligible employee), or until the employee ceases employment with the Telstra Group. The participant retains the beneficial interest (dividends, voting rights, bonuses and rights issues) in the shares until they are transferred at the end of the restriction period.

Further details can be found in the following tables.

Note 44: Employee share schemes (continued)

The details of these employee share plans for the year ended 30June2001 is shown in the following table.

Note 44: Employee share schemes (continued)

Note 44: Employee share schemes (continued)

(a)No allocation of Ownshares was made in March 2001.

Note 44: Employee share schemes (continued)

(c)Keycorp Limited employee share plans

Telstra holds a 50.94 per cent controlling interest in Keycorp Limited (Keycorp). Keycorp operates an employee share plan, established in the 1991-1992 financial year. The Keycorp Share Ownership Plan (KESOP) operates through a special purpose unlisted public company.

All Keycorp employees are eligible to subscribe for shares in the KESOP plan, which are acquired by the plan company at the prevailing open market share price. These shares are held for the benefit of, and in the name of, the participating employees.

In the 1996-97 financial year, Keycorp shareholders approved the establishment of a share option incentive plan for eligible employees. Under the plan, the price payable for options is determined as the average market price for Keycorp shares traded on the ASX for the five days preceding the date of the offer of the options.

The aggregate number of options and shares issued under the terms of the KESOP and option incentive plans over a five-year rolling period is limited to 15per cent of the number of Keycorp shares on issue. As at 30 June 2001 the aggregate level was 1.2percent.

Further details can be found in the following table.

(b)Comprising the six month period since Keycorp Limited was acquired by Telstra.


Note 45: List of Commonwealth entities

Controlled entities
Agriculture, Fisheries and Forestry Portfolio

General Government

Australian Fisheries Management Authority

Australian Pork Corporation

Australian Wine and Brandy Corporation

Cotton Research and Development Corporation

Dairy Adjustment Authority

Dairy Research and Development Corporation

Department of Agriculture, Fisheries and Forestry Australia

Fisheries Research and Development Corporation

Forest and Wood Products Research and Development Corporation

Grains Research and Development Corporation

Grape and Wine Research and Development Corporation

Land and Water Resources Research and Development Corporation

National Registration Authority for Agricultural and Veterinary Chemicals

Pig Research and Development Corporation

Rural Industries Research and Development Corporation

Sugar Research and Development Corporation

Tobacco Research and Development Corporation

Wheat Export Authority

Public Non-financial Corporations

Australian Dairy Corporation

Attorney-General’s Portfolio

General Government

Administrative Appeals Tribunal

Attorney-General's Department

Australasian Centre for Policing Research

Australian Bureau of Criminal Intelligence

Australian Customs Service

Australian Federal Police

Australian Institute of Criminology

Australian Law Reform Commission

Australian Security Intelligence Organisation

Australian Transaction Reports and Analysis Centre (AUSTRAC)

Criminology Research Council

Family Court of Australia

Federal Court of Australia

Note 45: List of Commonwealth entities (continued)

Attorney-General’s Portfolio (continued)

General Government (continued)

Federal Magistrates Service

High Court of Australia

Human Rights and Equal Opportunity Commission

Insolvency and Trustee Service Australia

National Crime Authority

National Native Title Tribunal

Office of Film and Literature Classification (including Classification Board and Classification Review Board)

Office of Parliamentary Counsel

Office of the Director of Public Prosecutions

Office of the Federal Privacy Commissioner

Public Non-financial Corporations

Australian Government Solicitor

Communications, Information Technology and the Arts Portfolio

General Government

Australia Business Arts Foundations

Australia Council

Australian Broadcasting Authority

Australian Broadcasting Corporation

Australian Communications Authority

Australian Film Commission

Australian Film, Television and Radio School

Australian National Maritime Museum

Bundanon Trust (company limited by guarantee)

Department of Communications, Information Technology and the Arts

Film Australia Limited

National Archives of Australia

National Australia Day Council Limited (by guarantee)

National Gallery of Australia

National Library of Australia

National Museum of Australia

Special Broadcasting Service Corporation

Public Financial Corporations

Australian Film Finance Corporation Limited

Note 45: List of Commonwealth entities (continued)

Communications, Information Technology and the Arts Portfolio (continued)

Public Non-financial Corporations

Australian Postal Corporation

Telstra Corporation Limited[1]

Defence Portfolio

General Government

Army and Air Force Canteen Service

Australian Military Forces Relief Trust Fund

Defence Housing Authority

Department of Defence

Royal Australian Air Force Veterans' Residences Trust Fund

Royal Australian Air Force Welfare Trust Fund

Royal Australian Navy Relief Trust Fund

Education, Training and Youth Affairs Portfolio

General Government

Australian National Training Authority

Department of Education, Training and Youth Affairs

Employment, Workplace Relations and Small Business Portfolio

General Government

Australian Industrial Registry

COMCARE Australia

Department of Employment, Workplace Relations and Small Business

Equal Opportunity for Women in the Workplace Agency

National Occupational Health and Safety Commission

Public Financial Corporations

Coal Mining Industry (Long Service Leave Funding) Corporation

Environment and Heritage Portfolio

General Government

Australian Greenhouse Office

Australian Heritage Commission

Department of Environment and Heritage

Director of National Parks

Great Barrier Reef Marine Park Authority

National Oceans Office

Note 45: List of Commonwealth entities (continued)

Family and Community Services Portfolio

General Government

Australian Institute of Family Studies

Centrelink (Commonwealth Service Delivery Agency)

Department of Family and Community Services

Finance and Administration Portfolio

General Government

Australian Electoral Commission

Commonwealth Grants Commission

Commonwealth Superannuation Administration

Department of Finance and Administration

Office of Asset Sales and IT Outsourcing

Public Non-financial Corporations

Australian Submarine Corporation Pty Limited

Bankstown Airport Limited

Camden Airport Limited

Comland Limited

Employment National

Essendon Airport Limited

Hoxton Park Airport Limited

Sydney Airports Corporation Limited

Foreign Affairs and Trade Portfolio

General Government

Australia-Japan Foundation

Australian Agency for International Development

Australian Centre for International Agricultural Research

Australian Secret Intelligence Service

Australian Trade Commission

Department of Foreign Affairs and Trade

Public Financial Corporations

Export Finance and Insurance Corporation

Note 45: List of Commonwealth entities (continued)

Health and Aged Care Portfolio

General Government

Aged Care Standards and Accreditation Agency Limited

Australia New Zealand Food Authority

Australian Institute of Health and Welfare

Australian Radiation Protection and Nuclear Safety Agency

Department of Health and Aged Care

Health Insurance Commission

Private Health Insurance Administration Council

Private Health Insurance Ombudsman

Professional Services Review

Public Financial Corporations

General Practice Education and Training Limited

Medibank Private Limited

National Institute of Clinical Studies Australia Ltd

Public Non-financial Corporations

Australian Hearing

Health Services Australia Limited

Immigration and Multicultural Affairs Portfolio

General Government

Department of Immigration and Multicultural Affairs

Migration Review Tribunal

Refugee Review Tribunal

Industry, Science and Resources Portfolio

General Government

Australian Geological Survey Organisation

Australian Institute of Marine Science

Australian Nuclear Science and Technology Organisation

Australian Sports Commission

Australian Sports Drug Agency

Australian Tourist Commission

Commonwealth Scientific and Industrial Research Organisation

Department of Industry, Science and Resources

IP Australia

National Standards Commission

Note 45: List of Commonwealth entities (continued)

Industry, Science and Resources Portfolio (continued)

Public Financial Corporations

Australian Industry Development Corporation

Public Non-financial Corporations

Australian Marine Science and Technology Limited (by guarantee)

Australian Technology Group Pty Limited

Snowy Mountains Hydro-electric Authority

Prime Minister and Cabinet Portfolio

General Government

Australian National Audit Office

Department of Prime Minister and Cabinet

Office of Inspector General of Intelligence and Security

Office of National Assessments

Office of the Commonwealth Ombudsman

Office of the Official Secretary to the Governor General

Public Service and Merit Protection Commission

Reconciliation and Aboriginal and Torres Strait Islander Affairs Portfolio

General Government

Aboriginal and Torres Strait Islander Commission

Aboriginal and Torres Strait Islander Land Fund

Aboriginal Hostels Limited (by guarantee)

Australian Institute of Aboriginal and Torres Strait Islander Studies

Department of Reconciliation and Aboriginal and Torres Strait Islander Affairs

Indigenous Business Australia