Portfolio Budget Statements 2004-2005
Environment and Heritage Portfolio
Budget Initiatives and Explanations of Appropriations 2004-2005
Budget Related Paper No. 1.7
ISSN 1448-1219 (Online), 1448-1200 (Print)
Part C - Agency Budget Statements (continued)
Bureau of Meteorology (continued)
Section 4 - Purchaser-Provider and Cost Recovery Arrangements
PURCHASER-PROVIDER ARRANGEMENTS
There are no formal purchaser provider arrangements for the Bureau of Meteorology.
COST RECOVERY ARRANGEMENTS
COST RECOVERY IMPACT STATEMENT
The Bureau has undertaken a review of its cost recovery arrangements against the Government's Cost Recovery Policy, consistent with the Government's review schedule.
Description of the Bureau's Cost Recovery Arrangements
The Bureau's role is to provide meteorological information and services in the public interest generally and in particular for the purposes of the defence force, navigation and shipping, civil aviation, primary production, industry, trade and commerce. It operates under the Meteorology Act 1955, Section 8 of which states that the Director of Meteorology may, subject to any directions of the Minister, make charges for forecasts, information, advice, publications and other matter supplied under the Act.
Over 90 percent of the products and services of the Bureau are of a ‘public good' nature and/or provided on a public interest basis. The Bureau also provides a limited range of cost recoverable services (value $24m in 2002-2003 and $28m estimated in 2003-04); and some commercial services (value $4.6m in 2002-2003) on the basis of competitive neutrality with private sector suppliers.
Cost recoverable services fall in one of three categories: civil aviation, defence, other specialised services.
Revenue from these services is summarised in the following table:
| Cost recoverable product group |
2002-03 $'000 (actual)
|
2003-04 $'000 (estimate)
|
|---|---|---|
| Aviation weather services |
13,968
|
14,826
|
| Defence weather services |
3,075
|
3,179
|
| Other specialised meteorological services |
6,854
|
9,630
|
The key guiding principle in structuring the cost recovery charge for services provided by the Bureau is to maximise the community's use of ‘public good' information and to minimise or avoid the call on taxpayer funding for all other services. The charge for cost recoverable services is based on the incremental cost of providing them i.e. the full direct and indirect costs (e.g. overheads) over and above that required to provide the Bureau's ‘basic' public-good services.
Compliance with the Government's Cost Recovery Policy
The charges set by the Bureau for its cost-recoverable services are in accordance with the Government's cost recovery policy and the guidelines for information agencies.
At the commencement of each annual budget cycle the Bureau estimates the revenue that it expects to receive from its cost-recoverable services. Owing to variations in demand that can occur throughout the year the actual revenue can vary from that originally forecast.
For example revenue from aviation services is ultimately linked to the volume of aircraft movements and in any given year there can be (albeit generally small) some under-recovery or over-recovery of revenue. These variations are taken into account in setting the charge for the subsequent year so that there is an evening out process over the longer term.
Consultation
The calculation of costs and estimation of charges, particularly for the two main cost recoverable groups (aviation and defence) involve regular consultation with the relevant stakeholders. For example a detailed breakdown of the proposed charge for aviation weather services is provided at the annual industry consultative meeting held prior to the beginning of the financial year and intended to obtain industry endorsement of the charge for the coming year.
Review
The Bureau, as part of its annual and longer term planning processes will continue to review its cost recovery arrangements in response to ongoing changes in its operating environment and the demand for meteorological products and services. The Bureau would expect to undertake a review similar in nature to a CRIS in the 2007-2008 financial year.
Budget statements
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