Australian Security Intelligence Organisation
Australian Security Intelligence Organisation
Section 1: Agency overview and resources
1.1Strategic direction statement
As Australia’s national security service, the Australian Security Intelligence Organisation (ASIO) is responsible for protecting Australia, its people and its interests from threats to security through intelligence collection, assessment and advice to government. The Australian Security Intelligence Organisation Act 1979 sets out ASIO’s role and defines ‘security’, thereby articulating, and setting the parameters for, those activities or ‘threats to security’ which ASIO has the responsibility to counter.
Threats to security include espionage, sabotage, politically motivated violence (the most common manifestation of which is terrorism), the promotion of communal violence, attacks on Australia’s defence system, acts of foreign interference, and serious threats to Australia’s territorial and border integrity. ASIO’s responsibility for the protection of security extends beyond Australia’s borders and includes Australia’s security obligations to other countries.
The threat posed by terrorism, and in particular Islamic jihadist terrorism, remains the most immediate and significant factor influencing the security of Australia and Australians here and overseas. The shift from centrally coordinated plots to
stand-alone, unilateral attacks, which is an increasing feature in the international environment, and the concerning trend of home-grown terrorism are principal areas of focus for ASIO. ASIO’s primary objective is to identify and take action to quickly disrupt those terrorist plans and aspirations, before they advance to the stage where Australian lives are put at risk.
Espionage and foreign interference are enduring threats to Australia’s security. Espionage through cyber means has emerged as a serious and widespread problem and is only likely to continue to gain prominence with the increasing reliance of the commercial, government and military sectors on digital technology.
ASIO’s visa security assessment function is an important element of the government’s wider border security strategy. ASIO’s workload in this area has increased considerably in recent years, and ASIO continues to respond to the challenge by constantly reviewing and refining processes to ensure that finite assessment resources are positioned to maximise efficiency, focus effort on cases of greatest risk and provide more expeditious management of cases of lower risk.
A continued focus on keeping abreast, and where possible ahead, of rapid technological development is imperative—from both a defensive and offensive posture. ASIO will continue to work closely with the Attorney-General’s Department and other partners to ensure that the legislative framework in which ASIO operates continues to keep pace with technology and changes in the operating environment and, consequently, continues to facilitate the achievement of the organisation’s mission.
After several years of accelerated growth, ASIO, in 2012–13, will need to adapt to a significantly tighter budgetary environment. Effectively managing this changed fiscal position, while ensuring the maintenance of a robust national security capability, is a key focus for ASIO’s senior management. The relocation to ASIO’s new headquarters in 2012–13 will also be a significant logistical endeavour and has a range of budget and investment project impacts.
In 2009, ASIO embarked on a strategic reform program of business modernisation to prepare it to respond technically and professionally to the environment in 2020. The work has enabled ASIO to identify and remove duplication, to streamline processes and procedures, to invest in capabilities which will deliver greater efficiencies in the future, and to engage in greater collaboration and capability sharing with its partners. The program has placed ASIO in a much better position to withstand the more challenging budgetary outlook it will face in coming years.
However, identification of further cost-saving measures, greater innovation and flexibility of staff, and rigorous risk management and prioritisation of effort will be critical.
Government expectations for a more integrated, better organised and more economical national intelligence community have never been higher. ASIO is working actively with close partners to share skills, capabilities and expertise not only in operational areas but also across a broad spectrum of corporate programs.
Similarly, ASIO seeks to further leverage its international partners to advance both investigations and understanding of global threat trends, and for capability development.
Engagement with industry for the protection of critical national infrastructure and to counter the insidious threat of cyber intrusion, is another important component of ASIO’s outreach strategy.
In response to increasing interest from the public, ASIO will continue efforts to balance the need to protect its information, sources and capabilities with the call for greater understanding of ASIO and its work. ASIO will continue to engage with communities, explore opportunities for the Director-General to present at appropriate public forums and raise awareness through its website and publications such as the annual report to parliament.
ASIO’s three-year strategic plan draws to a close in 2013. The plan has served ASIO well by aligning activity with ensuring a focus on the attainment of four core strategic goals: to strengthen intelligence collection and analysis capability, to enhance strategic impact, to build and manage the workforce of the future, and to improve business processes and practices. In 2012–13, ASIO will undertake a critical evaluation of performance against those goals and commence work on defining ASIO’s strategic vision and direction towards 2016.
1.2Agency resource statement
Table 1.1 shows the total resources from all sources.
Table 1.1: Agency resource statement—Budget estimates for 2012–13 as at Budget May 2012
Estimate ofprior year / Actual
amounts / + / Proposed / = / Total / available
available in / at Budget / estimate / appropriation
2012–13 / 2012–13 / 2012–13 / 2011–12
$’000 / $’000 / $’000 / $’000
ORDINARY ANNUAL SERVICES1
Departmental appropriation
Prior year departmental
appropriation2 / 239,668 / – / 239,668 / 298,379
Departmental appropriation3 / – / 400,735 / 400,735 / 347,352
s 31 relevant agency receipts4 / – / 4,709 / 4,709 / 4,700
Total ordinary annual services / 239,668 / 405,444 / 645,112 / 650,431
OTHER SERVICES5
Departmental non-operating
Equity injections / – / 5,062 / 5,062 / 41,806
Total other services / – / 5,062 / 5,062 / 41,806
Total available annual
appropriations / 239,668 / 410,506 / 650,174 / 692,237
Total net resourcing for agency / 239,668 / 410,506 / 650,174 / 692,237
All figures are GST exclusive.
1. Appropriation Bill (No. 1) 2012–13.
2. Estimated adjusted balance carried forward from previous year.
3. Includes an amount of $60.766m in 2012–13 for the departmental capital budget (see Table3.2.5 for further details). For accounting purposes this amount has been designated as ‘contributions by owners’.
4. Section 31 relevant agency receipts—estimate.
5. Appropriation Bill (No. 2) 2012–13.
1.3Budget measures
Table 1.2: Measures announced between 2011–12 Budget and 2012–13 Budget but not yet reported in a subsequent portfolio statement
2011–12 / 2012–13 / 2013–14 / 2014–15 / 2015–16Program / $’000 / $’000 / $’000 / $’000 / $’000
Expense measures
Reducing the cost of government administration—one-off efficiency dividend / 1.1
Departmental expenses / – / (9,055) / (9,397) / (9,327) / (9,419)
Total expense measures / – / (9,055) / (9,397) / (9,327) / (9,419)
Capital measures
Departmental capital budgets—savings / 1.1
Departmental capital / – / (15,221) / (11,925) / (8,476) / (8,559)
Total capital measures / – / (15,221) / (11,925) / (8,476) / (8,559)
Prepared on a Government Finance Statistics (fiscal) basis.
Section 2: Outcomes and planned performance
2.1Outcomes and performance information
Government outcomes are the intended results, impacts or consequences of actions by the government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs that contribute to government outcomes over the budget and forward years.
ASIO’s outcome is described below together with its related program, specifying the performance indicators and targets used to assess and monitor the performance of ASIO in achieving government outcomes.
ASIO has revised its outcome statement since the 2011–12 Portfolio Budget Statements to better reflect its mandate to government.
Outcome 1: To protect Australia, its people and its interests from threats to security through intelligence collection, assessment and advice to GovernmentOutcome 1 strategy
ASIO’s outcome supports the Australian Government’s policy aim of ‘A secure Australia in a secure region’.
The information provided in the ASIO budget statement has necessarily been limited by the need to observe the requirements of national security. This is consistent with current practice observed by ASIO in presenting its annual report, where all sensitive information is excluded in accordance with section 94 of the ASIO Act.
This budget statement contains broad information on appropriations and performance. Additional national security classified information is provided to the Attorney-General and the National Security Committee of Cabinet. This enables scrutiny of the detail of ASIO’s appropriations and performance information related to outcomes and programs.
Outcome 1 expense statement
Table 2.1 provides an overview of the total expenses for Outcome 1, by program.
Table 2.1: Budgeted expenses for Outcome 1
Outcome 1: To protect Australia, its people and its interests from threats to security through intelligence collection, assessment and advice to Government / 2011–12Estimated / 2012–13
actual / Estimated
expenses / expenses
$’000 / $’000
Program 1.1: Security Intelligence
Departmental expenses
Departmental appropriation1 / 338,904 / 357,578
Expenses not requiring appropriation in the budget year2 / 70,248 / 83,963
Total expenses for Outcome 1 / 409,152 / 441,541
2011–12 / 2012–13
Average staffing level (number)3 / 1,760 / 1,760
Note: Departmental appropriation splits and totals are indicative estimates and may change in the course of the budget year as government priorities change.
1. Departmental appropriation combines ‘Ordinary annual services (Appropriation Bill No. 1)’ and ‘Revenue from independent sources (s31)’.
2. Expenses not requiring appropriation in the budget year are made up of depreciation and amortisation expenses and resources received free of charge.
3. Calculation is an average headcount.
Contributions to Outcome 1
Program 1.1: Security IntelligenceProgram 1.1 objective
ASIO’s program objective is to protect Australia, its people and its interests from threats to security through intelligence collection, assessment and advice to government.
Program 1.1 expenses
ASIO’s expenses increase over the estimates due to additional rent commitments relating to ASIO’s new central headquarters. Funding has grown to cover a portion of the increased rent, with the remainder to be absorbed by ASIO.
2011–12 / 2013–14 / 2014–15 / 2015–16
Revised / 2012–13 / Forward / Forward / Forward
budget / Budget / year 1 / year 2 / year 3
$’000 / $’000 / $’000 / $’000 / $’000
Annual departmental expenses
Departmental item / 338,904 / 357,578 / 357,869 / 360,186 / 362,426
Expenses not requiring appropriation in
the budget year1 / 70,248 / 83,963 / 87,245 / 97,451 / 109,323
Total program expenses / 409,152 / 441,541 / 445,114 / 457,637 / 471,749
1. Expenses not requiring appropriation in the budget year are made up of depreciation and amortisation expenses and resources received free of charge.
Program 1.1 deliverablesThere are four components of the program, each providing a key contribution to the outcome:
•Security intelligence analysis and advice, including strategic, investigative and complex analysis; threat assessments; border security; critical infrastructure protection; policy contribution; and support to prosecutions.
•Protective security advice, including counter-terrorist checking, personnel security, physical security, and policy contribution.
•Security intelligence investigation and capabilities, including the maintenance and enhancement of all-source security intelligence collection, complex tactical and technical analysis, technical research and development, counter-terrorism response, national and international liaison, and policy contribution.
•Foreign intelligence collection in Australia at the request of the Minister for Foreign Affairs or the Minister for Defence, as well as incidentally through security intelligence investigations and liaison with overseas partners.
Due to national security reasons, ASIO is not able to provide details of its deliverables.
Program 1.1 key performance indicators
ASIO has two key performance indicators:
•the contribution of ASIO’s action and advice to the management and the reduction of risk to:
–people and property
–government business and national infrastructure
–special events of national and international significance, and
•the security of ASIO’s activities.
Achievement of these indicators will be monitored by:
•the level of government satisfaction as indicated by client feedback
•relevant client feedback on agency outputs in regard to quality and timeliness
•resource use against priorities and cost-effectiveness
•ASIO’s security performance, and
•maintenance of ASIO’s security integrity.
Section 3: Explanatory tables and budgeted financial statements
Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of agency finances for the 2012–13budget year. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations and program expenses.
3.1Explanatory tables
3.1.1Movement of administered funds between years
ASIO has no administered funds.
3.1.2Special accounts
ASIO has no special accounts.
3.1.3Australian Government Indigenous expenditure
ASIO has no Indigenous-specific expenses.
3.2Budgeted financial statements
3.2.1Differences in agency resourcing and financial statements
There is no material difference between the agency resourcing and financial statements.
3.2.2Analysis of budgeted financial statements
Income statement
Total expenses are estimated to be $441.541m in 2012–13, an increase of $32.389m from 2011–12. The increase is primarily the result of increased supplier expenses relating to additional rent commitments for ASIO’s new central headquarters.
ASIO is also expecting an operating loss of $6.180m in 2011–12 and $13.000m in
2012–13. The 2011–12 loss is attributable to a decrease in the long-term government bond rate. The 2012–13 loss is due to one-off rent and relocation costs associated with the move to ASIO’s new central headquarters.
Balance sheet
ASIO’s estimated net asset position is $416.200m in 2012–13, a decrease of $31.035m from 2011–12. The decrease is attributable to the realignment of ASIO’s capital spending relating to the new central headquarters.
Capital budget statement
ASIO is estimating capital outlays of $208.347m in 2012–13, an increase of $92.908m from 2011–12, primarily relating to ASIO’s new central headquarters. These capital outlays are funded through prior year measures and internally by departmental resources.
3.2.3Budgeted financial statements tables
Table 3.2.1: Comprehensive income statement (showing net cost of services)
(for the period ended 30June)
actual / estimate / estimate / estimate / estimate
2011–12 / 2012–13 / 2013–14 / 2014–15 / 2015–16
$’000 / $’000 / $’000 / $’000 / $’000
EXPENSES
Employee benefits / 207,496 / 207,974 / 193,260 / 195,291 / 191,163
Supplier expenses / 131,508 / 149,704 / 164,709 / 164,995 / 171,363
Depreciation and amortisation / 70,148 / 83,863 / 87,145 / 97,351 / 109,223
Total expenses / 409,152 / 441,541 / 445,114 / 457,637 / 471,749
LESS:
OWN-SOURCE INCOME
Own-source revenue
Sale of goods and rendering of services / 2,300 / 2,309 / 2,319 / 7,427 / 6,100
Other / 2,400 / 2,400 / 2,400 / 2,300 / 2,310
Total own-source revenue / 4,700 / 4,709 / 4,719 / 9,727 / 8,410
Total own-source income / 4,700 / 4,709 / 4,719 / 9,727 / 8,410
Net cost of (contribution by)
services / 404,452 / 436,832 / 440,395 / 447,910 / 463,339
Revenue from government / 328,124 / 339,969 / 353,250 / 350,559 / 354,116
Surplus (deficit) attributable to
the Australian Government / (76,328) / (96,863) / (87,145) / (97,351) / (109,223)
OTHER COMPREHENSIVE INCOME
Changes in asset revaluation surplus / – / – / – / – / –
Total other comprehensive income / – / – / – / – / –
Total comprehensive income (loss) / (76,328) / (96,863) / (87,145) / (97,351) / (109,223)
Total comprehensive income (loss)
attributable to the Australian
Government / (76,328) / (96,863) / (87,145) / (97,351) / (109,223)
Note: Impact of net cash appropriation arrangements
2011–12 / 2012–13 / 2013–14 / 2014–15 / 2015–16
$’000 / $’000 / $’000 / $’000 / $’000
Total comprehensive income (loss)
less depreciation/amortisation
expenses previously funded through
revenue appropriations / (6,180) / (13,000) / – / – / –
Plus depreciation/amortisation expenses
previously funded through revenue
appropriations1 / (70,148) / (83,863) / (87,145) / (97,351) / (109,223)
Total comprehensive income (loss)
as per the statement of
comprehensive income / (76,328) / (96,863) / (87,145) / (97,351) / (109,223)
Prepared on Australian Accounting Standards basis.
1.From 2010–11, the government introduced net cash appropriation arrangements where Bill 1 revenue appropriations for the depreciation and amortisation expenses of Financial Management and Accountability Act 1997agencies were replaced with a separate capital budget provided through Bill 1 equity appropriations. See Table 3.2.5 for more information on the departmental capital budget.
Table 3.2.2: Budgeted departmental balance sheet (as at 30 June)
Estimated / Budget / Forward / Forward / Forwardactual / estimate / estimate / estimate / estimate
2011–12 / 2012–13 / 2013–14 / 2014–15 / 2015–16
$’000 / $’000 / $’000 / $’000 / $’000
ASSETS
Financial assets
Cash and cash equivalents / 21,865 / 19,497 / 17,492 / 23,813 / 19,585
Trade and other receivables / 245,195 / 102,028 / 109,012 / 33,489 / 2,684
Other financial assets / 594 / 594 / 594 / 873 / 873
Total financial assets / 267,654 / 122,119 / 127,098 / 58,175 / 23,142
Non-financial assets
Land and buildings / 189,389 / 210,169 / 216,853 / 273,060 / 254,569
Property, plant and equipment / 48,874 / 150,842 / 112,254 / 31,031 / 18,607
Intangibles / 7,317 / 9,053 / 3,900 / 24,950 / 18,025
Other non-financial assets / 13,578 / 12,197 / 13,924 / 17,414 / 15,233
Total non-financial assets / 259,158 / 382,261 / 346,931 / 346,455 / 306,434
Total assets / 526,812 / 504,380 / 474,029 / 404,630 / 329,576
LIABILITIES
Payables
Suppliers / 9,376 / 9,076 / 9,427 / 2,079 / 2,079
Other payables / 6,880 / 5,963 / 7,034 / 4,032 / 4,032
Total payables / 16,256 / 15,039 / 16,461 / 6,111 / 6,111
Interest-bearing liabilities
Lease Incentives / 2,913 / 2,514 / 2,275 / 1,390 / 1,390
Total interest-bearing liabilities / 2,913 / 2,514 / 2,275 / 1,390 / 1,390
Provisions
Employee provisions / 55,200 / 58,843 / 60,460 / 58,671 / 58,671
Other provisions / 5,208 / 11,784 / 18,106 / 24,877 / 24,877
Total provisions / 60,408 / 70,627 / 78,566 / 83,548 / 83,548
Total liabilities / 79,577 / 88,180 / 97,302 / 91,049 / 91,049
Net assets / 447,235 / 416,200 / 376,727 / 313,581 / 238,527
EQUITY
Parent entity interest
Contributed equity / 538,599 / 604,427 / 652,099 / 686,304 / 720,473
Reserves / 8,102 / 8,102 / 8,102 / 8,102 / 8,102
Retained surplus
(accumulated deficit) / (99,466) / (196,329) / (283,474) / (380,825) / (490,048)
Total parent entity interest / 447,235 / 416,200 / 376,727 / 313,581 / 238,527
Total equity / 447,235 / 416,200 / 376,727 / 313,581 / 238,527
Prepared on Australian Accounting Standards basis.
Table 3.2.3: Departmental statement of changes in equity—summary of movement (budget year 2012–13)
Asset / ContributedRetained / revaluation / equity/ / Total
earnings / reserve / capital / equity
$’000 / $’000 / $’000 / $’000
Opening balance as at 1 July 2012
Balance carried forward from
previous period / (99,466) / 8,102 / 538,599 / 447,235
Adjustment for changes in
accounting policies / – / – / – / –
Adjusted opening balance / (99,466) / 8,102 / 538,599 / 447,235
Comprehensive income
Surplus (deficit) for the period / (96,863) / – / – / (96,863)
Total comprehensive income / (196,329) / 8,102 / 538,599 / 350,372
Transactions with owners
Contributions by owners
Equity injection—appropriation / – / – / 5,062 / 5,062
Departmental capital budget / – / – / 60,766 / 60,766
Sub-total transactions with owners / – / – / 65,828 / 65,828
Estimated closing balance
as at 30 June 2013 / (196,329) / 8,102 / 604,427 / 416,200
Closing balance attributable to the
Australian Government / (196,329) / 8,102 / 604,427 / 416,200
Prepared on Australian Accounting Standards basis.
Table 3.2.4: Budgeted departmental statement of cash flows (for the period ended 30 June)
Estimated / Budget / Forward / Forward / Forwardactual / estimate / estimate / estimate / estimate
2011–12 / 2012–13 / 2013–14 / 2014–15 / 2015–16
$’000 / $’000 / $’000 / $’000 / $’000
OPERATING ACTIVITIES
Cash received
Appropriations / 387,194 / 483,132 / 346,055 / 425,423 / 381,968
Sale of goods and rendering of services / 2,300 / 2,309 / 2,319 / 6,963 / 8,984
Other / 2,938 / 3,785 / 884 / 354 / 4,560
Total cash received / 392,432 / 489,226 / 349,258 / 432,740 / 395,512
Cash used
Employees / 197,768 / 204,331 / 191,643 / 197,080 / 191,163
Suppliers / 137,279 / 144,744 / 157,204 / 170,159 / 208,577
Total cash used / 335,047 / 349,075 / 348,847 / 367,239 / 399,740
Net cash from (used by)
operating activities / 57,385 / 140,151 / 411 / 65,501 / (4,228)
INVESTING ACTIVITIES
Cash used
Purchase of property, plant
and equipment / 115,439 / 208,347 / 50,088 / 93,385 / 34,169
Total cash used / 115,439 / 208,347 / 50,088 / 93,385 / 34,169
Net cash from (used by)
investing activities / (115,439) / (208,347) / (50,088) / (93,385) / (34,169)
FINANCING ACTIVITIES
Cash received
Contributed equity / 41,806 / 5,062 / 65 / 368 / –
Departmental capital / 19,228 / 60,766 / 47,607 / 33,837 / 34,169
Total cash received / 61,034 / 65,828 / 47,672 / 34,205 / 34,169
Net cash from (used by)
financing activities / 61,034 / 65,828 / 47,672 / 34,205 / 34,169
Net increase (decrease)
in cash held / 2,980 / (2,368) / (2,005) / 6,321 / (4,228)
Cash and cash equivalents at the
beginning of the reporting period / 18,885 / 21,865 / 19,497 / 17,492 / 23,813
Cash and cash equivalents at the
end of the reporting period / 21,865 / 19,497 / 17,492 / 23,813 / 19,585
Prepared on Australian Accounting Standards basis.
Table 3.2.5: Departmental capital budget statement
Estimated / Budget / Forward / Forward / Forwardactual / estimate / estimate / estimate / estimate
2011–12 / 2012–13 / 2013–14 / 2014–15 / 2015–16
$’000 / $’000 / $’000 / $’000 / $’000
NEW CAPITAL APPROPRIATIONS
Capital budgets—Bill 1 (DCB) / 19,228 / 60,766 / 47,607 / 33,837 / 34,169
Equity injections—Bill 2 / 41,806 / 5,062 / 65 / 368 / –
Total new capital appropriations / 61,034 / 65,828 / 47,672 / 34,205 / 34,169
Provided for:
Purchase of non-financial assets / 61,034 / 65,828 / 47,672 / 34,205 / 34,169
Total items / 61,034 / 65,828 / 47,672 / 34,205 / 34,169
PURCHASE OF NON-FINANCIAL
ASSETS
Funded by capital appropriations1 / 41,806 / 5,062 / 65 / 368 / –
Funded by capital appropriation—DCB2 / 19,228 / 60,766 / 47,607 / 33,837 / 34,169
Funded internally from
departmental resources3 / 54,405 / 142,519 / 2,416 / 59,180 / –
Total / 115,439 / 208,347 / 50,088 / 93,385 / 34,169
RECONCILIATION OF CASH
USED TO ACQUIRE ASSETS
TO ASSET MOVEMENT TABLE
Total purchases / 115,439 / 208,347 / 50,088 / 93,385 / 34,169
Total cash used to
acquire assets / 115,439 / 208,347 / 50,088 / 93,385 / 34,169
Prepared on Australian Accounting Standards basis.
DCB = departmental capital budget.
1. Includes both current and prior Bill 2appropriations.