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6. Financial performance
The financial results for 2021-22 through to 2024-25, underlying assumptions for the 2025-26 budget and forward years are set out in Table 24 (below), prepared on an accrual basis.4
Table 24 – AICIS financial performance ($’000)
| 2021-22 actual | 2022-23 actual | 2023-24 actual | 2024-25 actual | 2025-26 Budget | 2026-27 forward estimate | 2027-28 forward estimate | 2028-29 forward estimate | |
|---|---|---|---|---|---|---|---|---|
| Operational Expenses (A) | 19,197 | 21,650 | 24,069 | 28,674 | 22,905 | 23,680 | 24,334 | 25,083 |
| Cost Recovered Revenue – includes fees for services and levies (B) | 24,394 | 24,323 | 23,091 | 21,128 | 20,535 | 21,089 | 21,658 | 22,243 |
| Government appropriation - interest equivalency payment (C)5 | 58 | 34 | 760 | 1,802 | 1,936 | 1,936 | 1,936 | 1,936 |
| Balance = (B+C)-(A) | 5,255 | 2,707 | -219 | -5744 | -434 | -583 | -740 | -904 |
| Cumulative balance | 24,418 | 27,125 | 26,907 | 21,163 | 20,729 | 20,146 | 19,406 | 18,502 |
Revenue from industry fees and charges for 24-25 totalled $21.1 million a decrease of $2.0 million compared to the previous financial year. Total expenses were $28.7million, an increase of $4.6 million from the previous financial year, primarily due to a one-off accounting adjustment following a review of the department's accounting treatment and classification of capital and operating IT expense. AICIS net result for 2024-25 is a deficit of $5.7 million which has been factored into the overall departmental result.
6.1 Financial Estimates
Material variance commentary: The financial estimates are based on predicted levels of fee for service applications and the number of expected registrants at each level. The estimates also include a substantial increase to appropriation funding in the form of an interest equivalency payment from interest earned on funds held in the Industrial Chemicals Special Account. Revenue forecast for 2025-26 are subject to fluctuations in:
- numbers of fees for services applications
- number of companies per level listed on the Register of Industrial Chemical Introducers
The annual rolling CRIS and future pricing reviews will ensure transparency and ongoing accuracy of revenue and expenditure and detect any upward or downward variations.
Balance Management Strategy: A reserve is used as a risk mitigation measure to allow established charging arrangements to balance and lessen the impact of variable demand on the ongoing delivery of regulatory activities. The AICIS Reserve is fully committed to the following three components, which are maintained to facilitate business continuity requirements, to help fund the ongoing resourcing requirements of AICIS and to allow the Scheme to operate in a sustainable manner:
- Capital investment (41%): funds appropriated to AICIS by Government to support future IT capital projects and/or replacement of the AICIS IT System
- Three months operating reserves (31%)
- Employee entitlements (28%): Consistent with best practice, the reserve retains employee entitlements such as leave provisions.
AICIS remains committed to its defined Balance Management Strategy which is applied as a risk mitigation measure to manage the impact of variable demand on the ongoing delivery of regulatory activities while minimising any revenue over and above its cost base. Adjustments to charging have been demonstrated over consecutive years through price reductions across the levy charge (2022-23: 8% and 2023-24: 11.7%) and a charge in thresholds creating the 8 tier levels determined by total chemical introduction value in 2024-25 (allowing over 95% of registrants to keep or reduce their levy charge).
For 2025-26, although AICIS expects an inflationary impact on its cost base and a small deficit for 2025-26, a net balanced budget is expected due to revenue anticipated from prior year registration level upgrades notified by registered introducers.
Existing reserve balances will continue to be maintained for their defined purposes enabling AICIS to operate in a sustainable manner including future capital investments, employee entitlements and a 3-month operating reserve. Any supplementary balances accumulated (typically through increased program demand) will be actively monitored, with any impact on pricing outcomes to be communicated through future CRIS publications.
6.2 Financial outcomes
The financial results for the 2021-22, 2022-23, 2023-24 and 2024-25 years are shown in Table 25 (below).
Table 25 – Financial performance ($'000)
| Financial item | 2021-22 | 2022-23 | 2023-24 | 2024-25 |
|---|---|---|---|---|
| Estimates | ||||
| Revenue = W | 23,898 | 22,016 | 20,880 | 20,759 |
| Government appropriation - interest equivalency payment = X | 58 | 34 | 753 | 1,802 |
| Expenses = Y | 24,153 | 22,488 | 21,628 | 22,135 |
| Balance = (W+X) – Y | -197 | -438 | 5 | 426 |
| Actuals |
|
|
|
|
| Revenue = W | 24,394 | 24,323 | 23,091 | 21,128 |
| Government appropriation - interest equivalency payment = X | 58 | 34 | 760 | 1,802 |
| Expenses = Y | 19,197 | 21,650 | 24,069 | 28,674 |
| Balance = (W+X) – Y | 5,255 | 2,707 | -219 | -5,744 |
The costs of AICIS’s activities are recovered from industry except for appropriation funding in the form of an interest equivalency payment from interest earned on funds held in the Industrial Chemicals Special Account.
AICIS maintains a percentage of its reserves (as appropriated by government) to fund future IT capital projects and/or replacement of the AICIS IT system. The Government expects AICIS to manage within its cost recovery resources and therefore investment in new or replacement IT assets must come from the responsible management of cash reserves.
4 Figures reported in the Portfolio Budget Statements may differ as they are reported on a cash basis in accordance with the Public Governance, Performance and Accountability (Financial Reporting) Rule 2015.
5 IEP for the Forward Estimates is dependent on interest rates and cash balance in each year and hence AICIS has used the 2024-25 IEP.