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Final report

2017

Department of Agriculture and Food

F o c u s e d o n b u s i n e s s g r o w t h

Performance Significant issues AppendixContents Overview Disclosures and compliance 2

Department of Agriculture and Food, Western Australia | Final report 2017

Statement of complianceFor year ended 30 June 2017

Hon. Alannah MacTiernan MLC

Minister for Agriculture and Food

In accordance with section 63 of the Financial Management Act 2006, I hereby submit for your information and presentation to Parliament, the final report of the Department of Agriculture and Food, Western Australia for the financial year ended 30 June 2017.

The final report has been prepared in accordance with the provisions of the Financial Management Act 2006 and any other relevant written law.

Mandy Taylor Reporting Officer

Final report

2017

Department of Agriculture and Food, Western Australia



Contact

Postal: Locked Bag 4, Bentley Delivery Centre WA 6983Street address: 3 Baron-Hay Court, South Perth WA 6151Internet: agric.wa.gov.auEmail: [email protected]: +61 (0)8 9368 3333

ISSN 1834-3740

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The Chief Executive Officer of the Department of Agriculture and Food and the State of Western Australia accept no liability whatsoever by reason of negligence or otherwise arising from the use or release of this information or any part of it.

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Guide to this reportThis report presents the statutory compliance, performance and operational reporting for the financial year ending 30 June 2017. It consists of four principal sections and an appendix:

Overview — provides a snapshot of the year in review and outlines who we are and what we do, the industries and communities we support, and how we go about our business.

Agency performance — outlines what we have achieved along with details of how we performed against targets for the year.

Significant issues — describes current and emerging issues and trends affecting the agrifood sector and our operations.

Disclosures — details our financial situation and performance against our key performance indicators (KPIs) along with reports on staffing, governance and compliance issues. These reports demonstrate how we ensure our operations are ethically, socially and environmentally responsible.

Appendix — Statement by the Commissioner of Soil and Land Conservation (as required under the Soil and Land Conservation Act 1945).

In this report, we refer to the Department of Agriculture and Food, Western Australia as ‘the department’ or ‘DAFWA’.

A list of acronyms used is provided on the following page.



ABS Australian Bureau of Statistics

APC Agricultural Produce Commission

AEGIC Australian Export Grains Innovation Centre

AHA Animal Health Australia

BJD bovine Johne’s disease

CSIRO Commonwealth Scientific and Industrial Research Organisation

DAA Department of Aboriginal Affairs (WA)

DAWR Department of Agriculture and Water Resources (Commonwealth)

DAIP Disability access and inclusion plan

DAFWA Department of Agriculture and Food, Western Australia

DFES Department of Fire and Emergency Services (WA)

DoL Department of Lands (WA)

DoP Department of Planning (WA)

DoW Department of Water (WA)

DPIRD Department of Primary Industries and Regional Development (new department as of 1 July 2017)

DPW Department of Parks and Wildlife (WA)

DRD Department of Regional Development (WA)

EDRMS electronic document and records management system

EEO equal employment opportunity

FOI freedom of information

FPC Forest Products Commission

FTE full-time equivalent (staff hours)

GRDC Grains Research and Development Corporation

GVAP gross value of agricultural production

KPI key performance indicator

LCDs Land Conservation Districts

NFP not-for-profit

NCoS net cost of service

NRM natural resource management

OSH occupational safety and health

RfR Royalties for Regions

R&D research and development

RSPCA Royal Society for the Prevention of Cruelty to Animals

TPP tomato potato psyllid

UWA University of Western Australia

WA Western Australia

WAAFFFI Western Australia’s Agrifood, Fibre, Fisheries and Forestry Industries (document)

WANDRRA Western Australian Natural Disaster Relief and Recovery Arrangements

WARMS WA Rangeland Monitoring System

Acronyms

Performance Significant issues AppendixContents Overview Disclosures and compliance


6

Contents

Statement of compliance 2

Guide to this report 4

Acronyms 5

Overview 7

Executive summary 8

Operational structure 15

Performance management framework 26

Shared responsibilities with other agencies 28

Agency performance 31

Report on operations 32

Financial targets 36

Financial performance 38

Key financial ratios 40

Summary of key performance indicators (KPIs) 42

Significant issues impacting the agency 53

Current and emerging issues and trends 54

Disclosures and legal compliance 59

Financial statements 60

Index of notes to the financial statements 75

Additional key performance indicator information 139

Ministerial directives 154

Other financial disclosures 154

Governance disclosures 159

Other legal requirements 161

Government policy requirements 168

Appendix 177



Overview


Frost agronomy trial plots



July August September October November December

Implemented new Workforce and Diversity Plan to help develop our staff Unveiled six new

subterranean clovers at Dowerin field days

Established SoilsWest Alliance with UWA

Welcomed two new detector dogs to Quarantine WA service

Released Western Australian Biosecurity Strategy

Facilitated establishment of Australia’s first Aboriginal producer group (page 173)

Relaunched WAAFFFI publication featuring valuable industry statistics

Recorded 70% increase in website visitors for 2016Awarded 20 grants

totalling $6.7m to grower groups as part of Agricultural Sciences R&D Fund project

Ran inaugural Pantry Blitz community biosecurity program (page 41)

Executive summaryYear at a glance

2016

Opened Western Australian Premium Food Centre in Manjimup



January February March April May June

Began 40th year of European wasp surveillance and eradication

Ran skin cancer screening program for staff (page 170) Appointed new director to

drive animal welfare reform

Mapped barley genome for the first time (page 49)

Installed final of three Doppler radars in the Wheatbelt (page 35)

Completed infrastructure stage of Gascoyne Food Bowl Initiative (page 52)

Ran WA’s Celebrity Signature Dish competition

Appointed 10 new crop research agronomists

Hosted inaugural State Horticulture Update

Welcomed latest Graduate program intake

Initiated national incident response to tomato potato psyllid (page 58)

Set up incident response to high rainfall and flooding across state

2017



Director General’s report

The 2016/17 financial year has proven to be an historic one for our department and the agriculture and food sector we serve.

As the year ended, DAFWA was preparing to join the departments of Fisheries and Regional Development and nine Regional Development Commissions to form the new Department of Primary Industries and Regional Development (DPIRD) as of 1 July 2017.

The amalgamation, announced in late April as part of the incoming government’s public sector reforms, will mark the end of more than 120 years of a standalone agriculture department in WA (the last state in Australia to have one).

It also signals the beginning of an exciting new journey as we form part of a larger department that will provide a stronger, more unified, service to WA’s vital primary industries and regions.

Focused on business growth

While the amalgamation announcement was significant, it did not outshine the many projects and services our department continued to deliver in 2016/17 across the state to grow and protect our state’s agrifood sector.

In particular, we undertook a significant amount of work to determine where and how we need to target our available resources to best support farm businesses and the agribusinesses that make up the sector.

This work included focusing on DAFWA’s role following the Stocktake and Future Directions review (see below) and consolidating evidence to develop a clearer picture of the opportunities for the state’s agribusinesses and industries.

We progressed a range of major projects (including those funded by Royalties for Regions) to grow the knowledge and capability of business and industry. This included installing three Doppler radars across the Wheatbelt to provide more precise weather information to help growers with decision making; and completing the Gascoyne Food Bowl project, which opened up an additional 400ha for irrigated agriculture.

We also reconfirmed our commitment to conducting R&D that supports the economic development of the sector. A key achievement was mapping the barley genome through our partnership with Murdoch University and an international consortium to enable breeders to better develop new and improved barley varieties.

Additionally, we continued to make use of technological advances, including the use of drones to survey land for pest animals and plants and to assess damage following natural disasters.




Taking stock of our role

In October 2016, we received the report and recommendations following the Stocktake and Future Directions Review initiated by the previous government.

The independent review looked at the critical and core functions of the department and our capacity to deliver on the government’s priorities.

The review recognised DAFWA’s critical role to grow and protect the agriculture and food sector. It also highlighted the impact of recent budget and staff cuts on our capacity and capability.

We examined each of the recommendations and will implement a new approach, with a focus on ensuring that science, innovation and industry partnerships strengthen our capacity.

We also recognised the importance of ensuring that the opportunities and challenges facing the agrifood sector are understood and addressed across government and industry.

As a result, we initiated discussions with key departments — including Premier and Cabinet, Regional Development, Water and Planning — to develop a whole-of-government shared vision for the sector and ensure our collective efforts are targeted, coordinated and effective. We plan to progress this as part of DPIRD in 2017/18.

Connecting with our clients

A key focus for the year was on better connecting with our clients to ensure we understand their needs and that industry and the community understand the value we can provide.

We encouraged staff to increase their engagement with businesses and industry representatives to talk about our projects and services and demonstrate how we are delivering major benefits for the agrifood sector.

Communicating our role will be even more important as we merge into DPIRD. We need to show our clients that agriculture will continue to be at the forefront of the new department’s operations.

Stepping up emergency response

Our emergency response resources were tested during 2016/17 as we responded to a number of serious biosecurity threats and incursions.

We established four separate incident responses in the second half of 2016 to help the sector manage the threats of Russian wheat aphid, Australian plague locusts, cucumber green mottle mosaic virus and green snail.



In early 2017, we set up a national incident response after the detection of tomato potato psyllid (TPP) — the first time the psyllid has been found in Australia — which has caused massive losses to the horticulture industries in New Zealand since its arrival there.

While these incidents stretched our capabilities and resources, they will ultimately strengthen our capacity to effectively respond to agricultural emergencies through the development and implementation of better policies and procedures.

Our response was backed by 137 staff completing nationally accredited emergency response training during the year. It is the efforts of these and all of our staff across the state that ensure our department continues to effectively protect the sector. Their professional approach and commitment to the task at hand has been outstanding. I would also like to acknowledge the strong support from WA industry that has worked professionally alongside DAFWA staff during these incidents.

Analysing our performance and finances

To improve our performance reporting, we implemented a revised outcome-based management framework, including increasing the number of services we report against from three to six to better reflect the breadth of our functions and activities.

Pleasingly, we met all three of our key performance indicator targets relating to how businesses rate our influence on the profitability, sustainability and innovativeness of their industry. In previous years, decreasing budgets and staff numbers had affected our ability to meet these targets. However, we are now starting to see the benefits of the department’s new approach to its business relationships and engagement with industry, as well as growing confidence and optimism about the future within the sector.

We also ended the financial year in a sound financial position, with a $12.8 million surplus, largely driven by the capitalisation of expenses associated with the Gascoyne Food Bowl Initiative.

Overall, this final report of DAFWA provides a good insight into what we have achieved and how we have performed as we look forward to continuing to support agribusiness growth as part of DPIRD in 2017/18 and beyond.

Mark Webb A/Director General



Key numbers

Staff

990We had an average of 990 full-time equivalent staff as at 30 June 2017

Efficiency

We met 8 out of 12 key efficiency indicators

Assets

$405MWe had total assets of $405 million

Effectiveness

We met 3 out of 4 key effectiveness indicators

Revenue

$213MOur operating revenues totalled $213 million

Expenditure

$200MOur total operating expenses were $200 million



Award-winning effortsNovember 2016

Our Finance team was acknowledged by the Auditor General as one of the top 20 best practice agencies in the state for financial reporting and controls in relation to our 2016 Annual report.

March 2017

Research Officer Steve Davies was announced the winner of the 2017 GRDC Western Region Seed of Light award for making a major contribution to communicating the outcomes of grains R&D in WA.

Principal research officers Dr Abul Hashem and Dr Ross Brennan accepted an award on behalf of DAFWA for an outstanding contribution to the Conservation Agriculture and Farm Mechanisation project in Bangladesh.

May 2017

Research Officer Brenton Leske was awarded one of three four-year postgraduate research scholarships (provided as part of DAFWA’s Boosting Grains Research and Development project and valued at $190 000 each) to increase the scientific research capability of the grains industry.

July 2016

Senior Veterinary Officer Michael Paton was presented with the Australian and New Zealand College of Veterinary Scientists (ANZCVS) President’s Award for Distinguished Service as a Member of Council.

September 2016

Senior Development Officer Caroline Peek received the Ag Institute of Australia WA Division’s Award of Excellence in recognition of more than 30 years of applied research and extension in agriculture and NRM.

October 2016

Pest Diagnostics Imaging Officer Pia Scanlon earned a place in the top 20 of the Nikon International Small World competition for a microscope photo of a leaf beetle, magnified 40 times.

November 2016

DAFWA’s inaugural Pantry Blitz program, which encouraged ‘citizen scientists’ to identify and report pests in their pantry using a trap and mobile phone app, won the Rural Media Association of Western Australia’s Best Communications Campaign award.

Michael Paton

Steve Davies

Brenton Leske (left)

Pia Scanlon



Operational structure

Enabling legislation

The Department of Agriculture and Food, Western Australia was established in 1894 and operates under the Public Sector Management Act 1994.

Responsible Minister

The Hon. Alannah MacTiernan MLC Minister for Agriculture and Food; Regional Development Minister Assisting the Minister for State Development, Jobs and Trade

DAFWA’s Buy West Eat Best program developed the ‘Good Choice’ campaign during the year to encourage WA consumers to buy local



Department profile

Our role

DAFWA forms part of the state government’s effort to develop and diversify the WA economy.

We work in partnership with businesses, communities and other governments to help grow and protect our agriculture and food (agrifood) sector in ways that offer long-term benefits to all Western Australians.

We focus equally on growing the sector’s economic contribution to WA and protecting its reputation as a world-class producer of premium quality agrifood products.

This role is expected to evolve in 2017/18 to reflect the new state government’s emphasis on job creation and the broader role of the new Department of Primary Industries and Regional Development.

Our vision

A progressive, innovative and profitable agrifood sector that benefits WA.

Our purpose

To lead the state government’s efforts to ensure that our agrifood sector — at all points along the value chain — has the legislative framework, policy settings, capabilities, resources, knowledge and intergovernmental relations it needs to grow profitably and responsibly.

Our support for the agrifood sector

Western Australia’s agrifood sector comprises thousands of production, processing, marketing and related businesses. DAFWA is part of the sector, driving government’s role in helping the sector to grow and prosper in ways that benefit the state as a whole.

We work with industry, governments and others to help agrifood businesses grow while nurturing the land and water resources entrusted to them. Our work is increasingly targeted at working with those businesses committed to expanding their operations in markets — and with products — that best play to WA’s strengths. The increased economic activity and business resilience that this generates will benefit all Western Australians — especially those in the agricultural and pastoral regions.

Our support for the wider community

Our skills and resources allow us to minimise the impact of exotic pests and diseases that would otherwise threaten human health and amenity; and our environmental capabilities enable us to manage a range of natural resource issues that affect the state as a whole.

Our partners

We work closely with agrifood industries and businesses, from suppliers of raw materials through to producers, processors, marketers and consumers. We partner with scientists, innovators and regulators throughout the world to make the best use of global advances in agriculture and food. We also work with people considering a business, investment or career in the sector, and those concerned about agricultural practices or food issues.



Department of Agriculture and Food, Western Australia | Annual report 2017

17

Celebrating our history

Our department, under a variety of names, has supported the development and growth of WA’s agrifood sector for 123 years, operating alongside hard-working and innovative agriculture industries and communities.

As our staff prepare to join the new Department of Primary Industries and Regional Development on 1 July, we are celebrating the department’s history and achievements as a standalone agriculture department.

Below is a timeline of key facts, events and achievements. Significant parts are sourced from the book In response to need – a history of the Western Australian Department of Agriculture from 1984 to 2008 by former department employee Noel Fitzpatrick.

Timeline

1894 – Premier John Forrest established the Bureau of Agriculture to guide, regulate and protect the state’s expanding agricultural industry.

We began publishing the Journal of Agriculture, which ran until 1909 and then from 1924 to 2000.

1896/97 – A serious yet unsuccessful attempt was made to eradicate Mediterranean fruit fly, which remains a significant pest today.

1898 – The bureau became the Department of Agriculture and was placed under the control of the Minister for Lands, Forests and Agriculture.

The Hamel Field Station (WA’s first research station) was established near Waroona.

1902 – Construction started on the rabbit-proof fence. Maintaining the fence became a major undertaking for the department.

1909 – We took on the responsibility of providing water supplies and road clearing in advance of settlement to aid settlement in outlying areas.

The Bureau of Agriculture was first established in St Georges Terrace, Perth




18

1914–18 – Ninety-seven officers (50% of the male staff) enlisted in World War I. Seven won Military Medals and one, Alfred E Gaby, was posthumously awarded a Victoria Cross.

1918 – Inspections of grain for export began.

1921 – A cadetship scheme started that produced 63 veterinarians, 129 agricultural scientists and 10 medical laboratory technologists between 1921 and 1977.

1920s/30s – We increased our focus on science-based research and extension.

1926 – Muresk Agricultural College opened at Northam. The college was handed over to the WA Institute of Technology (now Curtin University) in 1969.

Early 1930s – Animal production research began with a focus on fat lamb production.

1930s – The department had dramatic success in solving serious health problems in sheep and cattle in the medium and higher rainfall districts.

1939–45 – Throughout World War II, the department focused on supporting the war effort and keeping the economy running. This included maximising vegetable production and publishing a vegetable growing guide for home gardeners.

1950s/60s – The department expanded substantially. Rural research funding and the Commonwealth Extension Services Grant provided additional funding for research, extension and training.

1957–61 – New offices at South Perth were completed progressively. Most head office staff had transferred from the city to South Perth by the end of 1959.

1964 – We started publishing Agricultural Memo (AgMemo), initially from Esperance, to stay connected with farmers across the regions. AgMemo still exists today, now as an e-newsletter.

1970s – We developed the Cripps Pink (marketed as Pink LadyTM) and Cripps Red (marketed as Sundowner™ in most places) apple varieties. Pink Lady, in particular, has become an international success story in more than 70 countries.

Minister for Agriculture, Mr EK Hoare, laid the foundation stone for the first buildings for the new South Perth headquarters in 1956




19

1977 – The European wasp surveillance program was established to eradicate incursions and prevent the wasp from establishing in WA. The successful program continues to this day.

1979 – Prince Charles visited the (former) Avondale Research Station to open an historic machinery exhibition, celebrating the 150th anniversary of WA’s foundation.

1980 – The first open day was held at our South Perth headquarters. An estimated 8000 people attended, including the Premier, a number of ministers and 1000 school children.

1987 – The department moved into farm management extension, which proved successful.

1995 – The department was renamed Agriculture Western Australia following amalgamation with the Agriculture Protection Board and the Rural Adjustment and Finance Corporation.

1995–2008 – We increased our focus on the specific needs of markets and opportunities.

2002 – A Food Program was developed to provide greater value to agricultural industries through work beyond the farm gate.

2006 – The department was renamed the Department of Agriculture and Food, Western Australia, reflecting an increasing focus on the food industry.

2009 – The award-winning Indigenous Landholder Service was established to provide support to Indigenous landholders (now run through the Aboriginal Business Development unit).

2007/08 – The first commercial wheat breeding company, InterGrain Pty Ltd, was established in partnership with GRDC.

2008 – The Buy West Eat Best food marketing program was launched to encourage the community to buy local produce.

2008/09 – We oversaw the establishment of the first trials of genetically modified (GM) canola to be permitted in WA.

2012 – In collaboration with the GRDC, the Australian Export Grains Innovation Centre (AEGIC) was officially opened to support the trade and use of Australian grains across the world.

2014 – The world’s first vaccine for the major sheep parasite Barber’s pole worm — developed by the department in conjunction with the Moredun Research Institute in Edinburgh — was launched for commercial use.

2016 – Launched new BravoTM apple variety, the culmination of more than two decades of R&D. The variety provides an excellent export opportunity.

2017 – The state government announced DAFWA would be amalgamated into DPIRD from 1 July.

Prince Charles (left) at the former Avondale Research Station



A/Director General Mark Webb

Strategy and Governance

Audit and Integrity

Biosecurity and RegulationExecutive DirectorKevin Chennell

Business SupportExecutive DirectorJim Eftos

Grains and Livestock IndustriesExecutive DirectorPeter Metcalfe

Grains R&D TransformationExecutive Director Mark Sweetingham

• Animal Welfare Regulation

• Border Biosecurity

• DAFWA Diagnostic Laboratory Services

• Invasive Species

• Livestock Biosecurity

• Plant Biosecurity

• Regulatory Policy and Standards

• Soil Commissioner

• Communications and Promotion

• Emergency Management Capability

• Finance

• Information

• Legal and Commercial

• People

• Projects and Contracts

• State NRM Office

• Beef Industry Development

• Food and Industry Development

• Grains and Livestock Policy, Strategy and Administration

• Regional Operations and Business Development, Central Region

• Regional Operations and Business Development, Southern Region

• Livestock Industry Development

• Grains R&D Business Development

• Grains Research and Innovation

• Horticulture Science and Industry Development

• Irrigation Development and Agribusiness

• Land and Water Assessment

• Regional Operations and Business Development, Northern Region

Irrigated AgricultureExecutive DirectorJohn Ruprecht

Organisation chart



Corporate executive team

Our extended Executive team: Standing (from left) Irrigated Agriculture Executive Director John Ruprecht, Grains and Livestock Executive Director Peter Metcalfe, People Director Kim Waller, Business Support Executive Director Jim Eftos, A/Director General Mark Webb, Audit and Integrity Director Alexandra Filipe, Grains R&D Transformation Executive Director Mark Sweetingham and Corporate Communications Director Scott Heffernan. Sitting (from left) Finance Director Mandy Taylor, Biosecurity and Regulation Executive Director Kevin Chennell and Strategy and Governance Director Catherine Lyons




Kevin Chennell, Executive Director: Kevin has qualifications in veterinary radiology, education and management. He worked in private practice and in a range of senior government and industry roles before joining DAFWA in 2008. Kevin is passionate about leading

change, innovation and building relationships with industry and other key stakeholders.

Biosecurity and Regulation: The directorate’s actions underpin production, market access, competitiveness and assuredness. We maintain WA’s favourable biosecurity status and market access by reducing the risk of pest and disease incursions, by developing and implementing surveillance techniques and by instituting rapid response capabilities for animal and plant biosecurity hazards. Additionally, the directorate administers regulations that provide evidence of food safety and integrity, ensures the animal welfare status in WA, and facilitates prevention and mitigation of land degradation through the Soil and Land Conservation Act 1945.

Executive team

Mark Webb A/Director General: Mark has a Degree in Science (Agriculture) Hons from the University of Western Australia and a Postgraduate Certificate in Cross-sector Partnership from the University of Cambridge (UK). He was appointed A/Director General

of DAFWA in March 2016 after being Chief Executive Officer of the Botanic Gardens and Parks Authority for 12 years. Mark was previously employed by DAFWA for more than 15 years and worked in South Perth, Manjimup, Kununurra and Albany. He has extensive experience in horticultural research, public and private sector management, farming and business. He also sits on a number of local, national and international committees and boards.



Jim Eftos, Executive Director: Jim has more than 17 years’ senior executive experience. He joined the department in February 2015 from Polytechnic West, where he was General Manager, Resources and Corporate Services. He has significant

knowledge and experience in forming public policy, financial management, human resources, workforce planning, governance and compliance, communications, and information and business systems.

Business Support: The directorate’s primary task is to provide the services and resources necessary for DAFWA to achieve its strategic priorities. Key services include financial management, people, communications and marketing, legal and commercial services, as well as improving our facilities and information and business systems, and emergency management response capability. The directorate also incorporates the State Natural Resource Management Office, which facilitates the coordinated delivery of NRM in WA.

Peter Metcalfe, Executive Director: Peter’s farming background and Bachelor of Business (Agriculture), combined with a career spanning more than 35 years with DAFWA, confirms his commitment to the state’s agrifood sector. He works with key policy makers,

industry leaders and funding bodies both with and outside Australia to create a more sustainable agrifood sector. Peter’s focus on enabling development has seen him oversee the creation of the southern hemisphere’s largest automatic weather station network across WA.

Grains and Livestock Industries Development: The directorate works with businesses that produce, process and market grains, meat, dairy, poultry (eggs and meat), bees and honey, intensely processed food products and fibre, and who are committed to, and capable of, contributing to doubling the value of the agriculture and food sector by 2025, as well as other relevant public stakeholders.

Mark Sweetingham, Executive Director: Mark has long been involved in the Australian grains industry and is internationally recognised in the fields of crop protection, farming systems, crop genetics and plant biosecurity. Throughout his career, he has been passionate

about increasing the value of the grains industry, in partnership with industry, through R&D and innovation activities.

Grains R&D Transformation: The directorate is responsible for grains R&D, including projects in partnership with the GRDC and collaborators such as universities, CSIRO, grower groups, and other state government departments. The projects focus on enabling WA grain growers to increase their business productivity and profitability. The directorate is also supporting the transition of grains R&D delivery to a new model with greater industry involvement and private sector investment.

John Ruprecht, Executive Director: John has more than 30 years’ experience in agriculture and resource management spanning a range of senior management and policy positions concerning water resource assessment, engineering and remediation,

urban development, sustainable agriculture, and biosecurity. John is committed to working with industry to increase the value of horticulture and ensuring the productive capacity of our soil and water resources.

Irrigated Agriculture: The directorate is responsible for land and water assessment, horticulture industry development, irrigation development and agribusiness, and regional development and operations for northern WA.



Administered legislationThe Minister for Agriculture and Food is responsible for administering the following Acts:

Aerial Spraying Control Act 1966Agricultural and Veterinary Chemicals (Taxing) Act 1995Agricultural and Veterinary Chemicals (WA) Act 1995Agricultural Produce Commission Act 1988Agriculture and Related Resources Protection Act 1976Animal Welfare Act 2002Biological Control Act 1986Biosecurity and Agriculture Management Act 2007Biosecurity and Agriculture Management Rates and Charges Act 2007Biosecurity and Agriculture Management (Repeal and Consequential Provisions) Act 2007Bulk Handling Act 1967Exotic Diseases of Animals Act 1993Gene Technology Act 2006Industrial Hemp Act 2004Loans (Co-operative Companies) Act 2004Ord River Dam Catchment Area (Straying Cattle) Act 1967Royal Agricultural Society Act 1926Royal Agricultural Society Act Amendment Act 1929Rural Business Development Corporation Act 2000Soil and Land Conservation Act 1945Tree Plantation Agreements Act 2003Veterinary Chemical Control and Animal Feeding Stuffs Act 1976Veterinary Surgeons Act 1960Western Australian Meat Industry Authority Act 1976



Other key legislation impacting on activitiesWe comply with the following Acts in performing our functions:

Conservation and Land Management Act 1984Contaminated Sites Act 2003Corruption and Crime Commission Act 2003Disability Services Act 1993Electoral Act 1907Electronic Transactions Act 2011Emergency Management Act 2005Environmental Protection Act 1986Equal Opportunity Act 1984Financial Management Act 2006Firearms Act 1973Forest Products Act 2000Freedom of Information Act 1992Government Employees’ Housing Act 1964Health (Miscellaneous Provisions) Act 2016Industrial Relations Act 1979Land Administration Act 1997Library Board of Western Australia Act 1951Medicines and Poisons Act 2014Minimum Conditions of Employment Act 1993Occupational Safety and Health Act 1984Occupiers’ Liability Act 1985Parliamentary Commissioner Act 1971

Public Interest Disclosure Act 2003Public Sector Management Act 1994Salaries and Allowances Act 1975State Administrative Tribunal Act 2004State Records Act 2000State Superannuation Act 2000State Supply Commission Act 1991Transfer of Land Act 1893Waterways Conservation Act 1976Wildlife Conservation Act 1950Workers’ Compensation and Injury Management Act 1981



Performance management framework

Changes to our management frameworkIn January 2016, DAFWA adopted a new parliamentary reporting structure — formally known as an outcome-based management framework — which was first presented in the 2016/17 State Budget. The principal changes in the new structure are:

• replacement of the existing three services with six new services

• inclusion of a third government goal — ‘Financial and Economic Responsibility’.

The revised structure provides greater detail and more meaningful information to stakeholders on our services and activities, and reinforces our focus on supporting and enabling the growth of the agrifood sector, while protecting the state’s resources.

Outcome-based management frameworkThe department contributes to three government goals: Stronger Focus on the Regions; Social and Environmental Responsibility; and Financial and Economic Responsibility.

We seek to bring about one outcome: ‘A profitable, innovative and sustainable agrifood sector that benefits Western Australia’; and we do this by way of six services. These are shown — along with the indicators by which we assess our performance — in Table 1.

Both our effectiveness in achieving this outcome and our efficiency in performing the services are detailed in the Summary of key performance indicators (p. 42) and the Detailed information in support of key performance indicators (p. 139) sections of this report.



Table 1 Outcome-based management framework

Government goals Desired outcome Effectiveness indicators Services Efficiency indicators

Stronger focus on the regions Greater focus on service delivery, infrastructure investment and economic development to improve the overall quality of life in remote and regional areas

Social and environmental responsibility Ensuring that economic activity is managed in a socially and environmentally responsible manner for the long-term benefit of the state

Financial and economic responsibility Responsibly managing the state’s finances through the efficient and effective delivery of services, encouraging economic activity and reducing regulatory burdens on the private sector

A profitable, innovative and sustainable agrifood sector that benefits Western Australia

1. Proportion of co-investment in DAFWA-led initiatives

2. Proportion of businesses that consider DAFWA has positively influenced the profitability of the sector

3. Proportion of businesses that consider DAFWA has fostered innovation in the sector

4. Proportion of businesses that consider DAFWA has positively influenced the sustainability of the sector

1. Market development, investment and market access Helping WA agrifood businesses increase their attractiveness to markets by developing the marketing and business arrangements they need to remain competitive in global and domestic markets

2. Productivity improvement and innovation Helping businesses optimise the technical side of their business by increasing the volume and cost effectiveness of their products

3. Business development and promotion Commercial components needed for success — facilitating investment-ready value chains, and business skills and knowledge based on the latest information

4. Productive natural resources Supporting the productive capacity of the natural resources and biological assets that underpin the economic development of the sector

5. Biosecurity and product integrity DAFWA’s legislative and regulatory responsibilities (such as biosecurity, animal welfare and emergency response); and its role in developing product integrity — one of our foremost advantages in global agrifood trade.

6. A business environment for growth DAFWA’s leadership in partnering with stakeholders across the regulatory, policy and planning settings affecting the agrifood sector.

The efficiency with which DAFWA undertakes each of its six services is estimated by the same two indicators (i.e. a total of 12 efficiency indicators reported on).

Two indicators:

1. Net service cost as a factor of the gross value of agricultural production

2. Co-investment in DAFWA-led initiatives related to net cost of service



Shared responsibilities with other agencies

We work with a range of national, state and local agencies to serve agrifood industries, related communities and the state. Our major shared responsibilities are outlined below.

Table 2 DAFWA’s shared responsibilities with other agencies

Area Collaborating agencies Mechanisms

Animal welfare RSPCA; Federal Department of Agriculture and Water Resources (DAWR); Animal Health Australia (AHA); state agency jurisdictions; industry

National animal welfare policies, standards and guidelines; promoting livestock stewardship. Ethical use of animals for scientific research; Recommendations of Easton review (2015)

Beef industry development Queensland Department of Agriculture and Fisheries; Northern Territory Department of Primary Industry and Fisheries; DAWR; Department of State Development (overseas trade missions)

Northern Beef Futures RfR project (including market and supply chain development; Indigenous participation; capacity and leadership; mosaic agriculture; infrastructure development and practice change on-station)

Dairy industry development

Dairy Australia, Western Dairy, South West Catchment Council and supply chain stakeholders

Western Australian Dairy Industry Growth Steering Committee

Emergency management Office of Emergency Management (OEM), state and local government authorities

State Emergency Management Committee (SEMC); emergency management plans, including Hazard Specific Plans (Westplans); support plans and national plans

European house borer Forest Products Commission (FPC); Building Commission (within Department of Commerce)

European House Borer Program

Export of plant-based commodities and equipment

DAWR; state and territory quarantine authorities Assessing and addressing regional pest risks associated with exporting plant commodities and associated equipment

Fertiliser use Department of Water (DoW); Department of Planning (DoP); Swan River Trust

Vasse Taskforce; Swan–Canning Water Quality Improvement Plan

Import pest risk analysis and subsequent import conditions

DAWR; state and territory quarantine authorities; industry Assessing and addressing international and national pest risks associated with importing plant commodities and associated equipment



Area Collaborating agencies Mechanisms

Land information and inventories

DoW; DoP; Department of Fire and Emergency Services (DFES); Department of Parks and Wildlife (DPW); Landgate; Department of Regional Development (DRD)

Geographic Information Services (GIS); Shared Land Information Platform (SLIP); Kimberley and Nullarbor land inventories

National Australian Biosecurity Framework

Queensland Department of Agriculture and Fisheries; Northern Territory Department of Primary Industry and Fisheries; DAWR

National Australian Biosecurity Framework surveillance, diagnostics, Indigenous rangers

National industry biosecurity plans

DAWR; AHA; Plant Health Australia (PHA); state and territory government agencies

Identification of key national pests and diseases and development of industry biosecurity plans; plans to manage biosecurity incident response and initial recovery

Natural disaster relief and recovery arrangements

DFES; WA Police; DPW; Main Roads WA; Department for Child Protection and Family Services; Department of Health; Department of Local Government and Communities; Water Corporation

Coordination of natural disasters under the Western Australian Natural Disaster Relief and Recovery Arrangements (WANDRRA); membership of state and district emergency management committees

Natural resource management

DPW; FPC; DoP; DoW; Department of Aboriginal Affairs (DAA); Department of Fisheries; State NRM Office

State NRM Program through the NRM Office and management of the Community Capability Grants and Community Action Grants programs

Plant and livestock biosecurity incident response

DAWR; state and territory quarantine authorities; AHA; PHA Response to incursion of national and regional quarantine pests. Framework for shared funding and action in emergency outbreaks and planning

Rural water DoW; Water Corporation; Wheatbelt shires Rural Water Council

Table 2 DAFWA’s shared responsibilities with other agencies (cont.)



DAFWA works with Dairy Australia, Western Dairy, the South West Catchment Council and supply chain stakeholders to help develop the state’s dairy industry



Agency performance


DAFWA’s South Perth headquarters



Report on operations

Key achievementsOur key achievements for 2016/17 are reported under the four growth areas set out in our Agrifood 2025+ Strategic plan 2014–17 (markets, profitability, productivity and people) and our commitment to biosecurity and natural resource management.

Growing markets

• We opened the Western Australian Premium Food Centre in Manjimup to help premium food producers to capture identified domestic and international market opportunities, upscale and coordinate production methods, and enhance promotional material.

• We attained trademark protection in Australia for the DAFWA-bred Bravo® apple, which is the premium fruit from ANABP 01 trees. Fruit West Co-operative Limited, which has been granted an exclusive licence by DAFWA to grow, pack and market Bravo® in Australia, negotiated with Woolworths to sell Bravo® apples across WA stores.

• We hosted WA’s Celebrity Signature Dish competition where four media, lifestyle and sporting personalities competed in a 60-minute cook-off at Elizabeth Quay as part of WA Day celebrations. The event, run through our Buy West Eat Best food labelling program, highlighted the premium produce that regional WA has to offer through significant media and social media coverage.

• We worked effectively with the strawberry industry to reestablish interstate trade following the detection of green snails in a consignment of WA strawberries in August 2016. We developed a green snail protocol that reopened trade within four weeks, and developed an online green snail inspector’s course and compliance arrangements to support property inspections.

• We funded a market development officer with vegetablesWA to work with growers to identify and achieve new opportunities in local, national or export markets. The role has been critical in resolving interstate trade issues associated with the insect pest tomato potato psyllid (TPP).

https://www.agric.wa.gov.au/strategic-plan-2014%E2%80%9317



Growing profitability

• We installed three Doppler radars across the Wheatbelt to give farm businesses access to improved weather data, enabling them to make more informed decisions to increase profitability and reduce business risk (see p. 35).

• We commissioned the Asian market success – premium agrifood market opportunity report that identified 20 high-growth, high-value premium food and beverage opportunities at the intersection of what Asian consumers want and what WA can produce. The combined market value of these products could add an extra $4 billion to the agrifood sector.

• We progressed our working alliance with the Agricultural Produce Commission (APC) citrus subcommittee to grow the value of the citrus industry from $14 million in 2016 to a potential $29.6 million. After 18 months, 90% of oranges now meet fruit quality specifications, and export volume has tripled.

• We undertook a Northern Beef Infrastructure Review, which identified priority projects to help increase the value of the beef industry in the Kimberley and Pilbara. As a result, a $500 000 grant was approved to develop a domestic cattle clearing and holding yard in Broome.

• We established the SoilsWest Alliance with UWA to use our combined scientific and research capabilities to develop the long-term future of soil science in WA, enhancing soil fertility and sustainability, and crop profitability.

Growing productivity

• We worked with an international team to map the barley genome, from which molecular markers and genomic breeding tools can be developed to enhance future barley varieties, and ultimately create better beer and whisky (see p. 49).

• We completed water and power infrastructure under the Gascoyne Food Bowl Initiative that will allow a further 400ha to be opened up for irrigated agriculture (see p. 52).

• We assisted the state government to deregulate the potato industry, including overseeing legal, financial and human resource matters related to the closure of the Potato Marketing Corporation. Deregulation provides growers with greater choice and flexibility to pursue higher value markets and value-adding opportunities.

• We bolstered resistance to the wheat disease, yellow spot, through the discovery of 11 new genes that will help make future wheat varieties less susceptible to the fungal pathogen. This offers wheat breeders additional material from which to develop varieties with higher and more durable levels of resistance to yellow spot.

• We released the new Durack oat variety, which has the potential to open up new areas of oat production in low–medium rainfall regions. This was complemented by the release of a milling oat variety guide and a successful tender to host the International Oats Conference in Perth in 2020.



Growing people

• We facilitated the establishment of Australia’s first Indigenous producer group, Noongar Land Enterprises (NLE), through our Aboriginal Business Development (South) project. NLE allows Aboriginal land managers in the south-west to seek new investment and business opportunities (see p. 173)

• We delivered workshops and training to agronomists, agribusiness consultants and grain growers on crop protection, agronomy and soil management, improving knowledge to facilitate robust and integrated crop management by grain-growing businesses.

• We had 137 staff complete either a Diploma or Certificate III in Public Safety (Biosecurity Response Management/Operations), enhancing our ability to respond to major animal or plant pest or disease incursions.

• We appointed 10 regionally based, early-career R&D staff to improve grain science depth and capacity and awarded postgraduate research scholarships, valued at $190 000 each, to three early-career scientists to increase the scientific research capability of the grains industry.

• We established the Sheep Meat Value Chain training program as part of the Sheep Industry Business Innovation project. This program created learning experiences for employees, professionals, undergraduates and recent graduates, resulting in a significant number of new professional entrants to the industry.

Boosting biosecurity and sustaining natural resources

• We launched the Western Australian Biosecurity Strategy — the state’s first — which sets the direction for management of biosecurity issues affecting agriculture, fisheries, forests and biodiversity up to 2025.

• We successfully ran emergency incident responses to a range of biosecurity threats, including Australian plague locust, cucumber green mottle mosaic virus, green snails and the first discovery of tomato potato psyllid (TPP) in Australia, helping to minimise the impact on industry and the community (see p. 58).

• We helped implement controls on the invasive weed, water hyacinth, in the south-west by commissioning drones to take aerial photographs along the Serpentine River and sending images to Landcare Serpentine–Jarrahdale to inspect for the presence of the weed.

• We supported industry with the development of a Wild Dog Action Plan 2016–21 to reduce the impact of wild dogs on agricultural industries.

• We gave the ‘all clear’ to the last of six Kimberley properties that had been quarantined after receiving infected bulls from Queensland in 2012. The all-clear followed an extensive testing program and close liaison with industry and affected producers to rule out the presence of bovine Johne’s disease (BJD), which is not known to occur in WA.



I n f ocus

New radars strengthen Wheatbelt weather dataInformation from Doppler radars, combined with data from the department’s 175 automatic weather stations, provides farm businesses with more precise information on rainfall, wind, temperature and soil moisture.

Farm business can use the data, which is updated on our weather website every six minutes, to make more informed on-farm business decisions

Under the radar: DAFWA Grains and Livestock Industries Executive Director Pete Metcalfe, Agriculture and Food Minister Alannah MacTiernan and Bureau of Meteorology A/WA Regional Director Grahame Reader at the opening of the Watheroo Doppler radar in June

on critical factors such as sowing dates, variety selection, input application rates and yield potential, improving farm production and profitability. They can also precisely determine the rainfall history of any point on their property.

Doppler upgrades are planned for existing weather radars at Geraldton, Esperance and Albany. Once completed, the WA Wheatbelt will have the most comprehensive radar coverage in the southern hemisphere.

I’ve been waiting for this for years. I will be able to track a cold front as it comes in and know how long I have to move livestock or plan my spray program.”– Cam Gethin, Hines Hill broadacre producer“

Technology plays an increasing role in boosting the international competitiveness of the agrifood sector.

The state government invested $23 million for DAFWA to construct three Doppler radar towers at Newdegate, South Doodlakine and Watheroo during 2016/17 to keep the local agricultural industry at the forefront of climate technology.

https://www.agric.wa.gov.au/weather-stations-and-radar



Financial targets

Table 3a Financial targets 2016/17

2016/17 Target (1)

$’000

2016/17 Actual $’000

Variation

$’000Explanation of variation (2)

Total cost of services (expense limit) (details from Statement of comprehensive income)

219 033 200 405 (18 628) Total cost of services is lower than budget estimates. This relates to underspend on externally funded projects that are carried over to the new financial year as well as a $15.2 million variance for the capitalisation of water infrastructure costs associated with the Gascoyne Food Bowl Initiative (refer to note 8 of the financial statements on p. 98).

Net cost of services

(details from Statement of comprehensive income)

166 903 150 879 (16 024) The net cost of service is mainly impacted by underspends on externally funded projects that are carried over to the new financial year and the capitalisation of $15.2 million of expenses associated with the Gascoyne Food Bowl Initiative.

Total equity (details from Statement of financial position)

340 491 369 149 28 658 The variance between actual and budget estimates has occurred as a result of the capitalisation of $15.2 million of expenses associated with the Gascoyne Food Bowl Initiative, RfR-funded capital items delayed until the 2018/19 year, and actual-to-estimate variances in the opening equity position at 1 July 2016.

Net increase / (decrease) in cash held (details from Statement of cash flows)

(8 037) (4 294) (3 743) The budget estimates did not include restricted cash on hand of $9.9 million relating to RfR projects. The lower than expected cash outflow is due to a variety of operational factors but principally the result of lower than budgeted expenses for supplies and services.

Approved salary expense level

99 477 99 145 332 The 2016/17 salary expense level is within 1% of target.

1. As specified in the Budget Statements.2. Further explanations are contained in note 39 of the financial statements.



Table 3b Working cash targets

2016/17 Agreed Limit

$’000

2016/17 Target (1) / Actual

$’000

Variation$’000

Explanation of variation (2)

Agreed working cash limit (at Budget)

10 338 10 338 N/A

Agreed working cash limit (at Actuals)

11 632 9 889 1 743 The variation is mainly due to savings generated throughout the year and reductions in expenditure on supplies and services.

1. As specified in the Budget Statements.2. Further explanations are contained in note 39 of the financial statements.



0

100

50

150

200

250

300

$ m

illio

n

Total actual revenue Total actual expenses

2015/16 2016/172014/152013/142012/132011/12

Financial performance

Operating resultThe operating surplus for the year was $12.8 million ($5.8m for 2015/16). The difference from the previous year is largely due to the capitalisation of costs associated with the Gascoyne Food Bowl Initiative.

Equity: what we’re worthEquity is net worth, which is calculated by what we ‘own’ (total assets of $405m) less what we ‘owe’ (total liabilities of $36m). At 30 June 2017, our equity was $369 million.

Assets: what we ownAt 30 June 2017, we had total assets of $405 million –– a slight increase from 30 June 2016. Property, plant and equipment account for 38% of our assets; restricted cash accounts for 17% of our assets.

Revenue: where the dollars came fromOur total operating revenues for 2017 amounted to $213 million. While total revenues are flat year on year, a decrease in both non-government revenue and appropriations from state government were offset by an increase in RfR funding.

Commonwealth grants and contributions (1%)

Non-government grants and subsidies (10%)

User charges and fees (6%)

Other revenue (incl. interest) (6%)

Royalties for Regions (22%)

Revenue from state government (55%)

$213M

$200M

Total actual revenue 2016/17

Total actual expenses 2016/17

Figure 2 Sources of funding

Figure 1 Total revenue and expenses 2012–17



Market development, investment and market access (12%)

Productivity improvement and innovation (18%)

Business development and promotion (8%)

Productive natural resources (6%)

Biosecurity and product integrity (32%)

A business environment for growth (24%)

Figure 3 Expenditure by service

Depreciation (4%)

Grants and subsidies (14%)

Supplies and services (22%)

Other (5%)

Employees (55%)

Figure 4 Main areas of expenditure 2017

Figure 5 Leave liability 2013–17

Expenses: how the dollars were spentOur total operating expenses for 2017 amounted to $200 million across our services. The decrease of 4% ($8m) is the result of the capitalisation of costs associated with the Gascoyne Food Bowl Initiative.

Our main areas of expenditure were our people, contracts and grants.

Liabilities: what we oweAt 30 June 2017, we had total liabilities of $36 million –– which are flat year on year. Our liabilities comprise payables (salary and other accruals and payables) and provisions (largely associated with annual leave and long service leave liabilities).

Leave liabilityThroughout 2016/17 we strengthened the management of our leave outside of guidelines policy by reducing the carryover of accrued annual leave of staff. Reduced by future booked leave, this represents 6% of our leave liability.

Staff were offered the opportunity to cash out accrued annual leave and long service leave in December 2016.

Aver

age

wee

ks p

er e

mpl

oyee

2013 2014 2015 2016 20170

2

4

6

8

10

12

The combined average for accrued annual and long service leave has fallen from 8.7 average weeks per FTE employee as at 30 June 2016 to 7.3 weeks per employee as at 30 June 2017.

Management strategies to reduce our department’s leave liability will continue throughout 2017/18.



Key financial ratios

Financial ratios provide a useful snapshot of the department’s financial status and trends, and measure our performance in achieving financial management objectives.

Table 4 Key financial ratios

Ratio and formula Measure description 2016/17 2015/16 Interpretation of result

Working capital Current assets v. current liabilities

Our ability to meet current commitments

4.4 times 2.8 times The ratio has increased as a result of the transfer of the South Perth headquarters from non-current assets into current assets due to its planned sale under the state government’s Land Asset Sale Program.

Government contribution Income from state government v. total income

Our dependence on state government revenue

76% 75% The department continues to rely on state government funding. A decrease in other income was offset by an increase in RfR funding, meaning total income was stable year on year.

Labour ratio Labour expenses v. total expenses

Our commitment to staff

55% 52% This ratio is significantly impacted by the department’s RfR projects. Expenditure on these projects impacts on the ratio, depending on how expenditure is allocated between supplies and services, and labour expenses.

Net worth movement Current year equity v. prior year equity

Growth in net assets 102% 103% There has been no significant change in the net worth of the department.

Current asset movement Current year current assets v. prior year current assets

Growth in current assets

159% 104% The ratio has increased as a result of the transfer of the South Perth headquarters from non-current assets into current assets due to its planned sale under the state government’s Land Asset Sale Program.

Current liabilities movement Current year current liabilities v. prior year current liabilities

Growth in current liabilities

99% 74% Current year liabilities from 2016 to 2017 are stable.



I n f ocus

Blitz shows biosecurity begins at home

“ Pantry Blitz is a great initiative that achieves community engagement and participation in biosecurity surveillance for pests that would have a significant impact on the state’s grain industry.” – Dr Simon McKirdy, WA Biosecurity Council

Everyone can play a part in protecting our food production industries from harmful or damaging pests.

This was highlighted during our inaugural Pantry Blitz in August and September 2016, which encouraged residents to become ‘citizen scientists’ and place a free trap in their kitchen pantry or household cupboard and report any pests they caught.

The aim was to enhance community biosecurity surveillance and provide data that supports WA’s claims of area freedom for certain exotic pests, which in turn ensures access to important export markets for agrifood.

The activity was a great success with 1877 participants registering for a free trap. We subsequently received 2252 biosecurity surveillance reports.

Residents were able to easily report their pest finds using our MyPestGuide Reporter app. The app allows people to use their

smart phones to create and send reports of any unusual insect, weed or animal back to us for expert identification.

To encourage residents to participate in Pantry Blitz, we developed and implemented a three-month communications campaign that included media releases, printed materials, social media posts, attendance at agricultural field days and shows, mail-outs and online information.

The campaign won the Rural Media Association of Western Australia’s Best Communications Campaign award.

The Pantry Blitz was an initiative of our Boosting Biosecurity Defences project and was funded by National Science Week.

The blitz will be back in late 2017 and will extend to South Australia as well as across WA.

Growing an audience: We developed Facebook and Twitter messages to maintain community momentum for the Pantry Blitz

https://www.agric.wa.gov.au/apps/mypestguide-reporter



Summary of key performance indicators (KPIs)Our outcome and services statements reflect our role as an economic development department. Effectiveness indicators help us assess the extent to which we are successful in achieving our outcome, and efficiency indicators let us benchmark our expenditure against the value of the sector. Indicators and results are outlined in Table 5, and explanations of the results are provided in the Detailed information in support of key performance indicators section on p. 139.

Table 5 Key effectiveness and efficiency indicator targets, results and variations

Outcome: A profitable, innovative and sustainable agrifood sector that benefits Western Australia 2016/17 Target

2016/17 Actual

Variation Target met

Key effectiveness indicators (impact scored at 5 or above)

Proportion of co-investment in DAFWA-led initiatives (%) 25.0 22.7 –2.3 ûProportion of businesses that consider DAFWA has positively influenced the profitability of the sector (%) 40.0 41.5 1.5 üProportion of businesses that consider DAFWA has fostered innovation (%) 40.0 43.7 3.7 üProportion of businesses that consider DAFWA has positively influenced sustainability (%) 43.0 47.7 4.7 üService 1 Market development, investment and market access

Key efficiency indicators

Net service cost as a factor of gross value of agricultural production (GVAP) (%) 0.30 0.26 –0.04 üPublic and private sector co-investment in DAFWA-led initiatives related to this service as a factor of the net cost of this service (%)

15.0 11.6 –3.4 û

Service 2 Productivity improvement and innovation


Net service cost as a factor of GVAP (%) 0.30 0.27 –0.03 üPublic and private sector co-investment in DAFWA-led initiatives related to this service as a factor of the net cost of this service (%)

45.0 69.7 24.7 ü



Outcome: A profitable, innovative and sustainable agrifood sector that benefits Western Australia 2016/17 Target

2016/17 Actual

Variation Target met

Service 3 Business development and promotion



25.0 21.7 –3.3 û

Service 4 Productive natural resources



35.0 100.1 65.1 ü

Service 5 Biosecurity and product integrity



25.0 11.0 –14.0 û

Service 6 A business environment for growth


Net service cost as a factor of GVAP (%) 0.50 0.53 0.03 üPublic and private sector co-investment in DAFWA-led initiatives related to this service as a factor of the net cost of this service (%)

10.0 7.8 –2.2 û

Table 5 Key effectiveness and efficiency indicator targets, results and variations (cont.)



Supporting information regarding our effectiveness indicatorsWe assess our effectiveness primarily on the extent to which business owners and managers believe we have positively influenced their industry over the past 12 months. These three KPIs are derived from an annual survey of producers, intermediaries (such as processors and exporters) and agrifood consultants.

Respondents are asked to score our impact on the profitability, environmental sustainability and innovativeness of their industries on a scale of zero to 10, where zero represents no impact, five is moderate, and scores of six or above are deemed significant.

Results of our 2017 survey — and how they compared with previous results and our 2016/17 target — are outlined in the detailed information in support of key performance indicators section on p. 139.

1. Supporting information regarding our impact on profitability

Driving profitability in the agrifood sector is at the core of our work.

The following commentary highlights some of the many ways we have helped agribusinesses to thrive. We have achieved this by developing and improving access to local and international markets, upskilling growers and business owners, and improving the ways we engage with industry to ensure we develop practical services and support.

Growing and developing markets

We have continued to grow existing markets and develop new markets for agrifood products to support industry’s target of doubling the real-term value of sales by 2025.

Key to finding new opportunities is understanding new and emerging markets. To aid this knowledge, a number of market access reports were published to support businesses in finding the right market opportunities for their products. Reports on seed potatoes, fruits and horticulture exports were developed, highlighting where we can make a difference to growers’ bottom lines.

More locally, six Transperth buses were used to jumpstart a program that educates the community about the benefits of supporting local food businesses. The Good Choice campaign, developed in collaboration with industry, reenergises our long-running Buy West Eat Best program. It aims to remind consumers that buying local not only supports local producers and retailers but also reaps other benefits such as the promotion of freshness and quality in local produce.



To help grow the value of the citrus industry from $14 million in 2016 to a potential $29.6 million, we teamed up with the APC’s citrus subcommittee to create a working alliance based on an annual contribution of $100 000. After 18 months, 90% of oranges now meet fruit quality specifications, export volumes have tripled, and the industry has become more cohesive through regular communication.

Twenty new projects will benefit from grants announced as part of the department’s $22.1 million Agricultural Sciences Research and Development Fund project, funded by RfR. The first round of funding from the Grower Group R&D Grants program focused on increasing economic growth in regional communities to drive agricultural growth.

People and training

We held our first ‘horticulture update’ for WA businesses in April 2017, with more than 120 people attending. The update focused on identifying strategies to support local business to achieve industry growth and international competitiveness.

We established a Cattle, Sheep and Goat Biosecurity Consultative Group with representation from key livestock industry stakeholders and government agencies. The department chairs the group, which will meet twice a year to discuss current and future biosecurity issues. Meanwhile, our Grains and Livestock Industries directorate has provided ongoing support and leadership to the Cattle Industry Funding Scheme management committee as it considers options to manage the continued threat of bovine Johne’s disease (BJD) to WA.

In conjunction with the department’s Aboriginal Business Development team, our Sheep Industry Business Innovation project delivered practical livestock management training to Aboriginal landowners. Delivered in six sessions over 12 months, the course covered topics such as weaning and preparing ewes for next year’s joining, and an economic analysis of different feeding strategies.

Agriculture Produce Commission Executive Officer Nardia Stacy talks about the BravoTM apple at the State Horticulture Update



I n f ocus

Making ‘BIG’ improvements to beef enterprisesDAFWA has supported WA’s northern beef businesses to make improvements to better meet market specifications for beef and live cattle.

Fifty-four businesses — about half of all eligible businesses in the Pilbara and Kimberley — applied for the Northern Beef

Futures project’s Business Improvement Grants (BIG) program.

The grants provide an incentive of up to $25 000 to access business advice and implement business improvements that enhance their competitiveness and prospects for growth.

Of the participants, 40 have been approved to progress or are realising their chosen business improvements.

Improving herd productivity, fencing and water systems, and technology to capture data on livestock and business performance are key

improvement themes emerging across participating businesses.

The BIG program is facilitating practice change by presenting the opportunity for northern beef producers to engage a consultant for mentoring and building the capacity of both producers and consultants.

Through BIG, our department is leaving a legacy in which continuous improvement is a standard business process that enables new markets to be met with diversified beef and cattle products.

The process of working with a business consultant has changed the way we do business.” – Mark Bettini, DeGrey Station owner-manager“

Farming duo Mark and Narelle Bettini run DeGrey station, east of Port Hedland

https://www.agric.wa.gov.au/r4r/northern-beef-futures




2. Supporting information regarding our impact on innovation

Today’s farms and stations are using a heady mix of data, math, hardware and software, sensors and analysis that go beyond what the eye can see. This technology provides new and exciting opportunities for farmers to increase production. We see our department’s role in innovation as exploring new ideas and helping businesses to adopt new technology — drones, apps, moisture sensors, smart irrigation, self-driving and GPS enabled tractors, and new plant varieties — to produce food more profitably and sustainably.

Harnessing technology

We commissioned an unmanned drone to detect the invasive weed, water hyacinth, along a 27km stretch of the Serpentine River. Landcare Serpentine–Jarrahdale narrowed down the 16 000 images collected to 105 images that pinpointed infestations for removal. Water hyacinth has the potential to block large sections of river and spread to other waterways. Similarly, we attracted federal funding when we led a trial using thermal sensors attached to aircraft and drones to detect feral pigs. If not managed, it is estimated that feral pigs could cause average production losses of $4.6 million a year in south-west WA alone. The trial aimed to strengthen the management of significant pest animals in Australia.

Small-scale pig owners and livestock industries have benefited from an engagement website, PigCentral, which provides a one-stop shop for pig keepers’ information needs. PigCentral was a 12-month activity under the Boosting Biosecurity Defences project, made possible by RfR. It provided information on biosecurity, general animal health and management information.

Our Geographic Information Services (GIS) streamlined the process for reporting the impact of emergencies on properties in regional and remote areas. The team developed an online program that automatically generates a full report on the impact of a fire. Meanwhile, we rolled out a new digital mobile mapping solution, Collector, which revolutionised our ability to detect and report instances of European House Borer, a serious pest of seasoned softwood timber.

21st century farming

Building on the success of previous years, we expanded our department’s range of mobile applications (apps), with several new tools developed. A soil sample app, for example, brought together all available soil information for R&D purposes. The app opens the door for new research opportunities to improve our understanding of soils, investigating soil constraints and identifying opportunities to improve plant production.

Our digital farming tools were popular in the past year and were on display at the 2016 Perth Royal Show. Using digital technology to improve farming practices was also a feature of our display at the Dowerin GWN7 Machinery Field Days. Visitors to both events were able to learn more about the way forward in digital farming and could view, download and test our new smartphone apps. Meanwhile, our PestFax service was kept busy in 2016 with more than 1100 reports of pests and diseases in grain-growing areas.

Construction and installation of new Doppler radars at Newdegate, South Doodlakine and Watheroo were completed in the past year. The $23 million investment, made possible through RfR, will provide advanced Doppler radar technology across the wheatbelt (see p. 35).

https://www.agric.wa.gov.au/newsletters/pestfax



New products

With innovation comes new products which, in turn, create new opportunities for success. In 2016/17, we developed and distributed a new oat variety, revised decision-support tools and created new variety-specific management packages for wheat, barley, oat, lupin, field pea and quinoa. In collaboration with Murdoch University scientists, we played a key role in mapping the barley genome for the first time, enabling breeders to develop new and improved barley varieties that can be used for clearer, tastier beers (see p.49).

Building on the launch of the Bravo® apple, we obtained Australian trademark protection in March 2017. Bravo apples — which have a unique sweetness, moderate to high crisp and crunch and a striking burgundy colour — are now available for purchase from various retailers.

DAFWA also supported the development of a number of entirely new products, the latest being jujubes (Chinese dates), with nutrient testing under way in WA orchards as part of a broader program to grow the industry. The jujube fruit grows on the Ziziphus jujuba tree and tastes crisp (like an apple) when fresh or sweet and chewy when dried. It has potential to be a new profitable agricultural business to meet the requirements of domestic and overseas markets. DAFWA continued to support the growth of the jujube industry in WA



I n f ocus

Breaking the code for better barleyThe development of new and improved barley varieties is set to accelerate after DAFWA played a key role in mapping the complete barley genome for the first time.

The Western Barley Genetics Alliance, a partnership between DAFWA and Murdoch University, was a major contributor to the international research, assisted by co-funding from GRDC.

The alliance worked in partnership with scientists from 10 countries, including Germany, the US, China and Switzerland, as part of the Barley Genome Sequence Consortium. This research was so large and complex that no single country had the capacity to complete it.

Mapping the barley genome effectively provides a ‘dictionary’

from which genetic ‘words’ and ‘sentences’ can be produced that identify the genes that control traits such as grain yield, grain quality, adaption to climate, and pest and disease resistance.

The research lays the foundations for plant breeders to target and combine more favourable gene combinations to develop new high-performance barley varieties, tailored to local environments and markets.

At last the genetic basis of the many traits that influence successful barley variety development is at our fingertips, providing almost limitless possibilities.” – David Moody, barley breeder, InterGrain and GIWA barley council member

DAFWA Principal Research Officer Chengdao Li and Agriculture and Food Minister Alannah MacTiernan celebrate the mapping of the barley genome

“

The benefits of this research will be far reaching, from improving WA malt and feed barley production to assisting food production in developing countries.



3. Supporting information regarding our impact on sustainability

Our goal of growing the agrifood sector is underpinned by environmentally sustainable practices, which involves us working in partnership with like-minded organisations and businesses that share our passion and energy for the sector. In the past year, our exacting biosecurity standards and practices have led to the detection of several exotic pests.

Responding to pests, diseases and industry emergencies

Staff from across the department came together to respond to the detection of the damaging insect pest, tomato potato psyllid (TPP), in the Perth area in February 2017, the first time the psyllid has been found in Australia. Our response to this incident drew together significant staff and resources at our emergency control centre at the South Perth head office. Forward command posts were also established at Albany, Manjimup and Carnarvon (see p. 58). Additionally, we led responses to eradicate or manage numerous other plant or animal pests and diseases, including Russian wheat aphid, Australian plague locust, cucumber green mottle mosaic virus, and green snails in strawberries.

Successful negotiations with the Commonwealth Government resulted in the protection of Australia’s bee industry, and saw the launch of a revised Biosecurity (Prohibited and Conditionally Non-prohibited Goods) Determination by the Commonwealth. The determination includes new import conditions to protect the WA bee industry’s freedom from the potentially devastating European foulbrood disease. More broadly, the efforts of our quarantine team resulted in more than 45 000 tonnes of quarantine-risk material being intercepted in the past financial year.

In 2016 an industry-led Wild Dog Action Plan was released. The 77-page plan aligns with the National Wild Dog Action Plan and was developed under the direction of an industry working group, affected landholders, regional communities and other interested parties. Wild dog predation on livestock takes a heavy economic and emotional toll on livestock producers in affected pastoral and agricultural areas.

Partnerships

The SoilsWest Alliance was established as a partnership between DAFWA and UWA. Soil science researchers combined scientific research capabilities to develop the long-term future of soil science in WA. This relationship is part of a range of new partnerships with universities and agribusinesses in R&D to improve crop productivity and profitability.

We collaborated with the Ord River District Co-operative Ltd (ORDCO) and the Northern Australia Crop Research Alliance partners to submit two applications to the Grower Group R&D grants program for priority research in the Ord Irrigation Area.

Overseas, relations with the Japan Ministry of Agriculture, Fisheries and Forestry have progressed with Irrigated Agriculture Executive Director John Ruprecht attending a forum in Tokyo to foster industry knowledge and commitment to a global value-chain strategy. Our department also took part in an international seed conservation project that aims to insure against the loss of plant germplasm during large-scale regional or global crises.

https://www.agric.wa.gov.au/invasive-species/western-australian-wild-dog-action-plan-2016-2021



Supporting infrastructure

DAFWA has reached the practical completion stage of establishing water and power infrastructure in the Gascoyne irrigation area as part of the Gascoyne Food Bowl Initiative. This included the construction of a 25km collector main in the northern borefield to deliver water from 35 new bores and four sand spears (see p. 52). Also in the north of the state, the Pilbara Hinterland Agricultural Development Initiative successfully delivered the Woodie Woodie pilot site research program, a centre-pivot irrigation system that uses surplus dewater from an adjacent mine site.

The Woodie Woodie irrigation trial site at Warrawagine Station near Marble Bar



I n f ocus

Project provides pipeline to horticulture growth

The expansion of the land and water will allow growers to capture new domestic and export market opportunities.” – Chris Collins, Chair Gascoyne Water Cooperative

“

Test drilling for production bores as part of the Gascoyne Food Bowl Initiative

Our department is creating a more exciting future for Carnarvon’s horticulture industry after completing the infrastructure phase of the $25m Gascoyne Food Bowl Initiative.

The groundworks, which included developing 35 production bores in the new northern borefield to access fresh-water aquifers, has created the opportunity to open up an additional 400ha of land suitable for horticultural development.

Other work included:

• installing 30km of high-voltage power line to service the new and existing northern borefield, reducing the cost of water extraction by more than 30%

• surveying the Gascoyne River and surrounds by air to gain a much-improved understanding of the aquifers, resulting in a significant increase in drilling success rate and an increase in flow rate from production wells

• installing 25km of collector main pipeline capable of delivering irrigation water at 400 litres per second

• installing four sand spears to extract water from the river sands when conditions are conducive, and also to monitor the water stored in the sands at any given time

• investigating the potential for a future extension to the northern borefield.

The identified area of just over 400ha suitable for horticulture has now been included in the Carnarvon Town Planning Scheme and approved by the Western Australian Planning Commission.

The longer-term objective is to increase the annual gross value of production of Carnarvon’s horticultural industry by about 35% or $30 million.

Significant issues AppendixContents Overview Disclosures and compliancePerformance 53


Significant issues impacting the agency


New Doppler radar at Newdegate



Current and emerging issues and trends

A range of significant issues and forces influenced our efforts in growing and protecting the WA agrifood sector in 2016/17.

We focused our efforts on maximising the value we can deliver to businesses and industries within the sector using available resources.

Growing worldwide demand for foodAround the world, hundreds of millions of people, particularly in Asia, are rising to middle-class status. This means people are eating more and have more money to spend on quality food products. The rising demand provides WA’s agrifood sector with opportunities to expand.

DAFWA supports productivity increases and the expansion of markets and trade so the sector can take advantage of these potential opportunities.

Most fundamentally, we released key research reports highlighting opportunities available to WA businesses, including the Investment Ready: WA Agribusiness report, which identified options for agrifood businesses to attract additional capital to grow.

We also established the Western Australian Premium Food Centre in Manjimup to identify markets for premium agrifood products and assist businesses statewide to upscale and coordinate production and promotion of high-value, low-input products.

Additionally, we funded six in-market development officers in China, Indonesia, India, Singapore and the Middle East to help WA exporters access new markets and develop premium products to meet consumer needs.

Project Officer Amelia de Groot, Food Industry Innovation Project Manager Kim Antonio and Manager Patricia Elphinstone at the new Premium Food Centre in Manjimup



Science and innovationScience, technology and innovation in agriculture is pivotal to our success in increasingly competitive domestic and international markets.

In 2016/17 we continued to deliver highly targeted, world-class R&D to accelerate the growth of the sector and economy, with key partners such as the GRDC, Meat & Livestock Australia and Horticulture Innovation Australia Ltd.

This included working with an international consortium to complete the map of the barley genome to accelerate the development of new and improved barley varieties (see p. 49). We also worked with Japanese scientists and WA universities to crack the genome sequence of the subterranean clover, which will revolutionise the development of new and improved forage legumes, ultimately leading to better livestock productivity.

Beyond the farm, we continued to complement our production research with a growing focus on value-chain analytics and business and value chain development.

Changing climate and variable weather

WA’s changing climate is elevating the frequency and severity of extreme weather such as frost, floods and bushfires. Technology and agricultural production systems designed to anticipate, prepare for and respond to these changes are essential for a growing agrifood sector.

During 2016/17, we installed three Doppler weather radars — which offer real-time information on weather systems and rainfall intensity — in the Wheatbelt to help farm businesses to make more informed decisions (see p. 35).

We also provided support following unseasonal widespread rainfall across the south coast and Great Southern in January and February 2017 that damaged agricultural land. We set up an incident response and worked with local governments in the affected areas and other government departments to provide support to affected landholders.

Our staff carried out flood impact assessments, which formed an integral part of the case to the Commonwealth to provide Western Australia Natural Disaster Relief and Recovery Arrangements (WANDRRA) funding to affected producers. We also set up a hotline and hosted a dedicated email and flood and cyclone recovery webpage to allow landholders to report damage and provide information to help them recover.

At the other end of the scale, we set up an incident response in late June to coordinate support to landholders affected by expected below-average rainfall during the 2017 growing season. By 30 June, we had established an incident response team, including technical specialists, and set up a dedicated resources webpage, including agronomic, livestock and wellbeing information.




Animal welfare

The demands on our department in effectively administering the Animal Welfare Act 2002 have steadily increased since we took over responsibility in 2011.

During the year, we appointed an Animal Welfare Director at a time when animal welfare regulation in WA was undergoing significant change following key recommendations of the 2015 Animal Welfare Review.

The director has taken the lead on some critical initiatives, such as a review of the Animal Welfare Act 2002, implementation of national welfare standards and guidelines for livestock, and the development of a state animal welfare strategy and policy, and inspector governance frameworks.

We are also building our animal welfare compliance team and focusing on improving community and industry awareness and engagement.

Tightening finances and resources

Reduced resources and funding as a result of the state government’s challenge in paying down debt, and a difficult economic environment, has placed increased pressure on agencies to deliver their services and functions more efficiently. While not alone, responding to this environment has proved challenging for our department, which has been subject to state government savings measures that are considered above the public sector’s average.

Our department has also faced a number of operational challenges unique to our business. A number of biosecurity incidents during 2016/17 have threatened the productivity, sustainability and competitiveness of WA’s agrifood sector. As a result, significant resources were reprioritised within the department to address these incidents, impacting our delivery in other business areas.

The caretaker period immediately before the 2017 election ensured no major policy or funding decisions were made. The subsequent machinery of government changes, including the amalgamation of DAFWA into DPIRD, has required a significant commitment of additional resources to support planning and implementation activities.

Nonetheless, and as supported by our 2016/17 KPI results, our department has successfully managed these challenges while delivering its services and functions to industry and government.

Changes in government/department amalgamationFollowing the election of the new state government in March 2017 and its announcement of public sector reforms, we have undertaken substantial work to prepare for our amalgamation into DPIRD, with key DAFWA staff joining the DPIRD Project Management Office to help determine the roles, structure, functions and systems required. This work will continue throughout 2017/18 as we fully integrate our resources and activities with the other amalgamating agencies.



The new department will continue to have a strong focus on agriculture and food, with the agrifood sector’s importance highlighted by the Premier hosting key agribusiness leaders in June 2017 as part of his Industry Engagement Consortia series. Consortium members confirmed the growth opportunities facing the sector, and stressed the importance of a strong partnership between industry and government to be able to capture those opportunities. The detailed findings of that meeting will be a major input into future planning in DPIRD.

Reducing red tape to increase competitivenessRemoving restrictions that make it difficult for industry to grow and take advantage of market opportunities is important, especially in the face of increased competition from low-cost producing countries.

Our Regulatory Burden Reduction project taskforce continued to explore opportunities to reduce barriers for business to drive economic growth. This included drafting regulatory changes to aerial spraying legislation aimed at removing onerous administrative requirements for aircraft pilots and spraying companies.

The introduction of DAFWA’s online grant management system, SmartyGrants, has also generated significant time-savings. Processing applications under declared WANDRRA events allows rural businesses to return to productivity faster after times of crisis.

We assisted the state government with the deregulation of the potato industry, overseeing legal, financial and human resource matters related to the closure of the Potato Marketing Corporation. This removed a 70-year restriction for growers, providing them with greater choice and flexibility to pursue higher-value markets and value-adding opportunities.

Threats from pests, weeds and diseasesThe profitability of the agrifood sector relies on our state’s freedom from many of the pests and diseases found elsewhere in the world, including other states of Australia. This is a result of our isolation and stringent biosecurity measures.

We continued to allocate significant resources to biosecurity, including through our robust quarantine and border operations (Quarantine WA) at targeted road checkpoints, airports, train stations and ports throughout WA. One example was appointing two new detector dogs to sniff out quarantine risk material at Perth Domestic Airport.

Trade and travel continued to increase with 122 306 vehicles, 2 144 464 airline passengers, 175 803 lines of imported produce and seed, and 11 493 head of imported livestock inspected.

We seized 45 384kg of biosecurity risk material in 2016/17 (including 4086kg of honey/apiary products), and a further 8283kg of produce was voluntarily dropped into amnesty bins at Perth Domestic Airport. Our inspection services resulted in 85 significant intercepts of pests, including coffee bean weevil, bulb mite and sweet potato weevil.

Prevention and eradication are not always possible and so we also boosted our emergency response capabilities. This included putting nearly 140 staff through accredited emergency response training; and setting up an emergency operations centre at our South Perth headquarters (on the back of hosting Exercise APOLLO — a cross-agency emergency response scenario — in May 2016).

The skills and facilities were put to good use during our responses to five biosecurity threats over the year, including the first discovery of tomato potato psyllid (TPP) in Australia, to minimise the impact on industry and the community (see p. 58).

I n f ocus



Taking the lead on tackling exotic plant pestThe tomato potato psyllid (TPP) may be small in size but has the potential to inflict enormous damage to horticultural industries.

After the plant pest was detected on commercial and residential properties in WA in February 2017 — for the first time in Australia — we set up and led a national biosecurity response that also

involved the state’s horticulture industries and community.

TPP attacks a range of vegetable crops, including tomato, eggplant, capsicum, chilli, tamarillo and sweet potato, and can significantly affect plant production.

It can also carry the bacterium Candidatus Liberibacter solanacearum (CLso), which is associated with the potato disease ‘zebra chip’.

Our incident response involved around 230 staff (nearly a quarter of DAFWA employees), including many who had received accredited emergency management training under the Boosting Biosecurity Defences project, and activated our new emergency control centre at South Perth.

Forward command posts were established in Albany, Manjimup and Carnarvon; and an annex was established at our Bunbury office to undertake the initial

screening test of potato tubers for the presence of CLso. Some 33 100 tubers, equating to 6.6 tonnes of potatoes, have been tested to date with no detection of CLso.

A quarantine area notice was also declared under the Biosecurity and Agriculture Management Act 2007.

During the response, 1427 properties across WA were surveyed; 9000 sticky traps were set up to capture TPP for identification and testing; information was provided to assist producers with on-farm biosecurity; and interstate trade movement restrictions were put in place to protect other jurisdictions.

By 30 June 2017, we had moved from an incident response to developing a transition to management plan following a national decision that it is not technically feasible to eradicate TPP in WA.

Above: Close-up of TPP on a leaf Left: Plant Biosecurity Technical Officer David Cousins collects TPP samples

http://www.planthealthaustralia.com.au/wp-content/uploads/2017/04/Zebra-chip-tomato-potato-psyllid-FS.pdf



Disclosures and legal compliance


DAFWA manages the Sheep Industry Business Innovation (SIBI) project



Financial statements

Certification of financial statementsFor the year ended 30 June 2017

The accompanying financial statements of the Department of Agriculture and Food, Western Australia have been prepared in compliance with the provisions of the Financial Management Act 2006 from proper accounts and records to present fairly the financial transactions for the financial year ended 30 June 2017 and the financial position as at 30 June 2017.

At the date of signing, we are not aware of any circumstances which would render any particulars included in the financial statements misleading or inaccurate.


15 August 2017



Statement of comprehensive income for the year ended 30 June 2017 Note

2017 2016

$’000 $’000

Cost of services Expenses

Employee benefits expense 6 110,315 108,710Supplies and services 8 43,953 61,165Depreciation and amortisation expense 9 7,925 11,403Share of loss in joint venture entities using the equity method 2,776 6,221Other expenses 10 6,891 1,571Grants and subsidies paid 11 27,305 19,114Loss on disposal of non-current assets 17 1,240 -

Total cost of services 200,405 208,184

Income Revenue

User charges and fees 13 13,067 11,361Commonwealth grants and contributions 14 3,389 3,530Grants and subsidies received 15 20,782 26,283Interest revenue 960 661Gain on disposal of non-current assets 17 - 16Other revenue 16 11,328 12,658

Total revenue 49,526 54,509

Total income other than income from state government 49,526 54,509

Net cost of services 150,879 153,675

Income from state government 18 Service appropriations 116,535 121,924Resources received free of charge 626 965Royalties for Regions Fund 46,478 36,624

Total Income from state government 163,639 159,513

Surplus for the period 12,760 5,838

Other comprehensive income Items not subsequently reclassified to net cost of services

Changes in asset revaluation surplus (10,412) 982Gains/(losses) recognised directly in equity - 19

Total other comprehensive income 33 (10,412) 1,001

Total comprehensive income for the period 2,348 6,839

The Statement of comprehensive income should be read in conjunction with the accompanying notes. See also the ‘Schedule of income and expenses by service’.



Statement of financial position as at 30 June 2017 Note

2017 2016

Assets $’000 $’000

Current assets Cash and cash equivalents 19 2,542 10,310Restricted cash and cash equivalents 20 68,182 64,953Biological assets 21 1,151 1,231Agricultural produce 171 145Inventories 22 633 573Receivables 23 4,004 5,279Amounts receivable for services 24 2,589 3,975Assets classified as held for distribution to owners 26 59,711 -Other current assets 25 1,160 1,779

Total current assets 140,143 88,245 Non-current assets

Restricted cash and cash equivalents 20 245 -Amounts receivable for services 24 72,897 65,660Other non-current assets 25 7,423 22,648Assets classified as held for distribution to owners 26 15,470 2,749Investments accounted for using the equity method 27 11,669 9,451Property, plant and equipment 28 153,080 208,233Intangible assets 30 4,297 2,836

Total non-current assets 265,081 311,577 Total assets 405,224 399,822 Liabilities Current liabilities

Payables 31 8,609 6,100Provisions 32 23,033 25,741

Total current liabilities 31,642 31,841 Non-current liabilities

Provisions 32 4,433 4,345Total non-current liabilities 4,433 4,345 Total liabilities 36,075 36,186 Net assets 369,149 363,636 Equity

Contributed equity 82,310 79,145 Reserves 225,192 235,604 Accumulated surplus 61,647 48,887

Total equity 33 369,149 363,636

The Statement of financial position should be read in conjunction with the accompanying notes. See also the ‘Schedule of assets and liabilities by service’.



Statement of changes in equity for the year ended 30 June 2017

Note

Contributed equity

ReservesAccumulated

surplus/deficit

Total equity

$’000 $’000 $’000 $’000Balance at 1 July 2015 33 74,986 234,622 43,030 352,638 Surplus/(deficit) for the period - - 5,838 5,838 Other comprehensive income - 982 19 1,001 Total comprehensive income for the period - 982 5,857 6,839 Transactions with owners in their capacity as owners:

Capital appropriations 6,006 - - 6,006 Other contributions from owners 914 - - 914 Distribution to owners (2,761) - - ( 2,761)

Total 4,159 - - 4,159 Balance at 30 June 2016 79,145 235,604 48,887 363,636 Balance at 1 July 2016 79,145 235,604 48,887 363,636 Surplus/(deficit) for the period 12,760 12,760 Other comprehensive income - (10,412) - (10,412)

Total comprehensive income for the period - (10,412) 12,760 2,348 Transactions with owners in their capacity as owners:

Capital appropriations 3,493 - - 3,493 Other contributions from owners 182 - - 182 Distribution to owners (510) - - (510)

Total 3,165 - - 3,165 Balance at 30 June 2017 33 82,310 225,192 61,647 369,149

The Statement of changes in equity should be read in conjunction with the accompanying notes.



Statement of cash flows for the year ended 30 June 2017 Note

2017 2016

$’000 $’000Cash flow from state government

Service appropriations 106,709 113,468 Capital contributions 3,675 6,006 Holding account drawdown 3,975 3,675 Royalties for Regions Fund 46,478 36,624

Net cash provided by state government 160,837 159,773 Utilised as follows: Cash flows from operating activities Payments

Employee benefits (111,070) (117,651)Supplies and services (53,597) (64,797)GST payments on purchases (8,043) (8,871)GST payments to taxation authority (253) (177)Other payments (5,298) (345)Grants and subsidies (27,173) (19,114)

Receipts User charges and fees 12,958 13,410 Commonwealth grants and contributions 3,257 3,530 Interest received 977 1,042 GST receipts on sales 3,009 3,366 GST receipts from taxation authority 6,585 3,939 Other receipts 32,504 38,405

Net cash used in operating activities 34 (146,144) (147,263)Cash flows from investing activities Payments

Investment in joint ventures (4,994) (5,491)Purchase of non-current assets (13,995) (8,222)

Receipts Proceeds from sale of non-current physical assets 2 665

Net cash used in investing activities (18,987) (13,048)Net (decrease)/increase in cash and cash equivalents (4,294) (538)Cash and cash equivalents at the beginning of period 75,263 75,801 Cash and cash equivalents at the end of period 34 70,969 75,263

The Statement of cash flows should be read in conjunction with the accompanying notes.



Schedule of income and expenses by service for the year ended 30 June 2017

Market development,

investment and market access

Productivity improvement and

innovation

Business development and

promotion

Productive natural resources

Biosecurity and product integrity

A business environment for

growthTotal

2017 2017 2017 2017 2017 2017 2017Cost of services $’000 $’000 $’000 $’000 $’000 $’000 $’000Expenses Employee benefits expense 10,866 20,356 7,940 13,425 38,803 18,925 110,315Supplies and services 7,416 7,258 4,949 (4,564) 17,940 10,954 43,953Depreciation and amortisation expense 868 1,120 605 1,003 2,600 1,729 7,925Share of loss in joint venture entities using the equity method 926 - 848 - - 1,002 2,776Other expenses 633 3,409 873 397 1,532 47 6,891Grants and subsidies paid 3,471 3,886 766 1,395 2,582 15,205 27,305Loss on disposal of non-current assets 123 283 99 164 340 231 1,240Total cost of services 24,303 36,312 16,080 11,820 63,797 48,093 200,405 Income Revenue User charges and fees 1,471 1,251 280 1,115 7,017 1,933 13,067Commonwealth grants and contributions 46 169 - 667 1,469 1,038 3,389Grants and subsidies received 1,394 11,079 1,839 3,037 2,122 1,311 20,782Interest revenue 185 165 160 106 138 206 960Gain on disposal of non-current assets - - - - - - -Other revenue 1,137 2,440 972 1,269 3,118 2,392 11,328Total revenue 4,233 15,104 3,251 6,194 13,864 6,880 49,526Total income other than income from state government 4,233 15,104 3,251 6,194 13,864 6,880 49,526Net cost of services 20,070 21,208 12,829 5,626 49,933 41,213 150,879 Income from state government Service appropriation 12,579 16,221 8,767 15,069 38,381 25,518 116,535Resources received free of charge 69 88 48 79 205 137 626Royalties for Regions Fund 7,623 5,842 3,036 3,990 7,374 18,613 46,478Total income from state government 20,271 22,151 11,851 19,138 45,960 44,268 163,639Surplus / (deficit) for the period 201 943 (978) 13,512 (3,973) 3,055 12,760 The Schedule of income and expenses by service should be read in conjunction with the accompanying notes.



Schedule of income and expenses by service for the year ended 30 June 2017

Business & supply chain development

Transformational development

Resource risk management

Total

2016 2016 2016 2016Cost of services $’000 $’000 $’000 $’000Expenses Employee benefits expense 46,507 18,087 44,116 108,710Supplies and services 23,047 25,491 12,627 61,165Depreciation and amortisation expense 4,817 2,827 3,759 11,403Share of loss in joint venture entity using the equity method 4,977 622 622 6,221Other expenses 799 270 502 1,571Grants and subsidies paid 9,525 5,769 3,820 19,114Loss on disposal of non-current assets - - - -Total cost of services 89,672 53,066 65,446 208,184 Income Revenue User charges and fees 2,863 639 7,859 11,361Commonwealth grants and contributions 509 368 2,653 3,530Grants and subsidies received 18,625 4,041 3,617 26,283Interest revenue 229 218 214 661Gain on disposal of non-current assets (2) 1 17 16Other revenue 7,294 2,958 2,406 12,658Total revenue 29,518 8,225 16,766 54,509Total income other than income from state government 29,518 8,225 16,766 54,509Net cost of services 60,154 44,841 48,680 153,675 Income from state government Service appropriation 50,160 22,338 49,426 121,924Resources received free of charge 408 239 318 965Royalties for Regions Fund 12,082 17,764 6,778 36,624Total income from state government 62,650 40,341 56,522 159,513Surplus for the period 2,496 (4,500) 7,842 5,838

The Schedule of income and expenses by service should be read in conjunction with the accompanying notes.



Schedule of assets and liabilities by service as at 30 June 2017

Market development,

investment and market access

Productivity improvement

and innovation

Business development

and promotion

Productive natural

resources

Biosecurity and product integrity

A business environment for

growthTotal

2017 2017 2017 2017 2017 2017 2017 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Assets Current assets 9,705 55,723 5,000 20,861 35,474 13,380 140,143 Non-current assets 27,678 52,569 19,956 43,006 69,600 52,272 265,081 Total assets 37,383 108,292 24,956 63,867 105,074 65,652 405,224 Liabilities Current liabilities 3,475 1,726 2,359 7,260 10,099 6,723 31,642 Non-current liabilities 486 626 339 561 1,454 967 4,433 Total liabilities 3,961 2,352 2,698 7,821 11,553 7,690 36,075 Net assets 33,422 105,940 22,258 56,046 93,521 57,962 369,149

The Schedule of assets and liabilities by service should be read in conjunction with the accompanying notes.



Schedule of assets and liabilities by service as at 30 June 2017

Business & supply chain development

Transformational development

Resource risk management

Total

2016 2016 2016 2016

$’000 $’000 $’000 $’000

Assets

Current assets 34,542 25,749 27,954 88,245

Non-current assets 121,963 90,915 98,699 311,577

Total assets 156,505 116,664 126,653 399,822

Liabilities

Current liabilities 12,464 9,291 10,086 31,841

Non-current liabilities 1,702 1,267 1,376 4,345

Total liabilities 14,166 10,558 11,462 36,186

Net assets 142,339 106,106 115,191 363,636

The Schedule of assets and liabilities by service should be read in conjunction with the accompanying notes.



Summary of consolidated account appropriations and income estimates for the year ended 30 June 2017

Estimate Actual Variance

Actual Actual Variance 2017 2017 2017 2016

Delivery of services $’000 $’000 $’000 $’000 $’000 $’000Item 65 Net amount appropriated to deliver services 114,669 114,408 (261) 114,408 120,307 (5,899)Amount authorised by Other Statutes – Biosecurity and Agriculture Management Act 2007 1,235 1,734 499 1,734 1,235 499 – Salaries & Allowances Act 1975 393 393 - 393 382 11 Total appropriations provided to deliver services 116,297 116,535 238 116,535 121,924 (5,389)Capital Item 137 Capital appropriations 301 301 - 301 4,877 (4,576) Administered transactions Item 66 Amount provided for Administered Grants, Subsidies and Transfer Payments 1,600 1,600 - 1,600 1,600 -Total administered transactions 1,600 1,600 - 1,600 1,600 -Grand total 118,198 118,436 238 118,436 128,401 (9,965)Details of expenses by service Market development, investment and access(1) 26,469 24,303 (2,166) 24,303 25,873 (1,570)Productivity, improvement and innovation(1) 38,735 36,312 (2,423) 36,312 42,511 (6,199)Business development and promotion(1) 20,772 16,080 (4,692) 16,080 16,944 (864)Productive natural resources(1) 26,254 11,820 (14,434) 11,820 32,711 (20,891)Biosecurity and product integrity(1) 66,208 63,797 (2,411) 63,797 56,961 6,836 A business environment for growth(1) 40,595 48,093 7,498 48,093 33,184 14,909 Total cost of services 219,033 200,405 (18,628) 200,405 208,184 (7,779)Less total income 52,130 49,526 (2,604) 49,526 54,509 (4,983)Net cost of services 166,903 150,879 (16,024) 150,879 153,675 (2,796)Adjustments(2) (50,606) (34,344) 16,262 (34,344) (31,751) (2,593)Total appropriations provided to deliver services 116,297 116,535 238 116,535 121,924 (5,389)Capital expenditure Purchase of non-current assets 13,026 25,700 12,674 25,700 9,136 16,564 Adjustment for other funding sources (12,725) (25,399) (12,674) (25,399) (4,259) (21,140)Capital appropriations 301 301 - 301 4,877 (4,576)Detail of income estimates Income disclosed as administered income (refer note 49) 8,917 9,670 753 9,670 8,785 885 8,917 9,670 753 9,670 8,785 885

(1) 2016 comparatives for ‘Details of expenses by service’ have been reclassified to align with the six lines of service in 2017.

(2) Adjustments are related to Royalties for Regions income and movements in cash balances and other accrual items such as receivables, payables and superannuation.

Note 39 ’Explanatory statement’ provides details of any significant variations between estimates and actual results for 2017 and between the actual results for 2017 and 2016.



Index of notes to the financial statements

Subject Policy Note Note title Subject Policy Note Note titleGeneral 1 Australian Accounting Standards Income 2(e) 13 User charges and feesGeneral 2 Summary of significant accounting policies Income 14 Commonwealth grants and contributionsGeneral 2(a) General statement Income 15 Grants and subsidies receivedGeneral 2(b) Basis of preparation Income 2(e) 16 Other revenueGeneral 2(c) Reporting entity Income/expense 2(e) 17 Net gain/(loss) on disposal of non-current assetsGeneral 2(d) Contributed equity Income 2(e) 18 Income from state governmentIncome 2(e) Income Asset 2(l) 19 Cash and cash equivalentsIncome 2(e) Revenue recognition Asset 2(l) 20 Restricted cash and cash equivalentsIncome 2(e) Sale of goods Asset 2(o) 21 Biological assetsIncome 2(e) Interest Asset 2(o) 22 InventoriesIncome 2(e) Service appropriations Asset 2(p) 23 Receivables Income 2(e) Net appropriation determination Asset 2(n) 24 Amounts receivable for services (holding account)Income 2(e) Grants, donations, gifts and other non-reciprocal contributions Asset 25 Other assetsIncome 2(e) Gains Asset 2(i) 26 Assets classified as held for distribution to ownersAssets 2(f) Property, plant and equipment and infrastructure Asset 27 Investments accounted for using the equity methodAssets 2(g) Intangible assets Asset 2(f) 28 Property, plant and equipmentAssets 2(h) Impairment of assets Asset 29 Fair value measurementsAssets 2(i) Assets classified as held for distribution to owners Asset 2(g) 30 Intangible assetsAssets/liability 2(j) Leases Liability 2(q) 31 PayablesAssets/liability 2(k) Financial instruments Liability 2(r) 32 Provisions Assets 2(l) Cash and cash equivalents Equity 2(d) 33 EquityAssets/liability 2(m) Accrued salaries Cash flow 34 Notes to the statement of cash flowsAssets 2(n) Amounts receivable for services (holding account) Expense 35 Services provided free of chargeAssets 2(o) Inventories and biological assets General 36 CommitmentsAssets 2(p) Receivables General 37 Contingent liabilities and contingent assetsLiability 2(q) Payables General 38 Events occurring after the balance sheet dateLiability 2(r) Provisions General 39 Explanatory statementExpense 2(s) Superannuation expense General 40 Remuneration of auditorsRevenue/asset 2(t) 18 Resources received free of charge or for nominal cost General 2(c) 41 Related bodiesGeneral 2(u) Joint arrangements General 42 Affiliated bodiesGeneral 2(v) Comparative figures General 2(u) 43 Jointly controlled assetsGeneral 2(w) Memorandum of understanding General 2(k) 44 Financial instrumentsGeneral 3 Judgements made by management in applying accounting policies General 2(k) 44(a) Financial risk management objectives and policiesGeneral 4 Key sources of estimation uncertainty General 2(k) 44(b) Categories of financial instrumentsGeneral 5 Disclosure of changes in accounting policy and estimates General 2(k) 44(c) Financial instrument disclosuresGeneral 5 Initial application of an Australian Accounting Standard General 45 Supplementary financial informationGeneral 5 Future Impact of Australian Accounting Standards not yet operative External 46 Indian Ocean Territories Service Level AgreementExpense 6 Employee benefits expense External 47 Special purpose accountsExpense 7 Compensation of key management personnel External 2(e) 48 Disclosure of administered income and expenses by serviceExpense 8 Supplies and services External 49 Explanatory statement for administered itemsExpense 9 Depreciation and amortisation expense External 50 Disclosure of administered assets and liabilities by serviceExpense 10 Other expensesExpense 11 Grants and subsidies paidGeneral 12 Related party transactions

for the year ended 30 June 2017



Notes to the financial statements for the year ended 30 June 2017

1 Australian Accounting Standards

General

The financial statements of the Department of Agriculture and Food, Western Australia (the department) for the year ended 30 June 2017 have been prepared in accordance with Australian Accounting Standards. The term ‘Australian Accounting Standards’ includes standards and interpretations issued by the Australian Accounting Standard Board (AASB).

The department has adopted any applicable new and revised Australian Accounting Standards from their operative dates.

Early adoption of standards

The department cannot early adopt an Australian Accounting Standard unless specifically permitted by Treasurer’s Instruction 1101 Application of Australian Accounting Standards and Other Pronouncements. There has been no early adoption of any Australian Accounting Standard that has been issued or amended (but not operative) by the department for the annual reporting period ended 30 June 2017.

2 Summary of significant accounting policies

(a) General statement

The department is a not-for-profit reporting entity that prepares general purpose financial statements in accordance with the Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB as applied by the Treasurer’s Instructions. Several of these are modified by the Treasurer’s Instructions to vary application, disclosure, format and wording.

The Financial Management Act 2006 and the Treasurer’s Instructions impose legislative provisions that govern the preparation of financial statements and take precedence over Australian Accounting Standards, the Framework, Statements of Accounting Concepts and other authoritative pronouncements of the AASB.

Where modification is required and has had a material or significant financial effect upon the reported results, details of that modification and the resulting financial effect are disclosed in the notes to the financial statements.

(b) Basis of preparation

The financial statements have been prepared on the accrual basis of accounting using the historical cost convention, except for land, buildings and biological assets which have been measured at fair value.

The accounting policies adopted in the preparation of the financial statements have been consistently applied throughout all periods presented unless otherwise stated.



As disclosed in Note 38, on 1 July 2017 the departments of Agriculture and Food, Regional Development and Fisheries and the nine Regional Development Commissions were amalgamated to form the new Department of Primary Industries and Regional Development. The financial statements have been prepared on a going concern basis as the net assets of the department have been transferred to the new department that will continue to provide the department’s services.

The financial statements are presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000).

Note 3 ‘Judgements made by management in applying accounting policies’ discloses judgements that have been made in the process of applying the department’s accounting policies resulting in the most significant effect on amounts recognised in the financial statements.

Note 4 ‘Key sources of estimation uncertainty’ discloses key assumptions made concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(c) Reporting entity

The reporting entity comprises the department and bodies listed at note 41 ‘Related bodies’.

Mission

The department’s mission is to work with our partners to develop the WA agriculture and food sector; and to effectively manage risks to the natural and biological resources on which it relies.

The department is predominantly funded by Parliamentary appropriations. It provides some services on a fee-for-service basis. The fees charged are determined by prevailing market forces. The financial statements encompass all funds through which the department controls resources to carry on its functions.

Services

The department provides the following services:

– Service 1: Market development, investment and market access– Service 2: Productivity improvement and innovation– Service 3: Business development and promotion– Service 4: Productive natural resources– Service 5: Biosecurity and product integrity– Service 6: A business environment for growth




The department administers assets, liabilities, income and expenses on behalf of government which are not controlled by, nor integral to, the function of the department. These administered balances and transactions are not recognised in the principal financial statements of the department but schedules are prepared using the same basis as the financial statements and are presented at note 48 ‘Disclosure of administered income and expenses by service’ and note 50 ‘Disclosure of administered assets and liabilities by service’.

(d) Contributed equity

AASB Interpretation 1038 Contributions by owners made to wholly-owned public sector entities requires transfers in the nature of equity contributions, other than as a result of a restructure of administrative arrangements, to be designated by the government (the owner) as contributions by owners (at the time of, or prior to transfer) before such transfers can be recognised as equity contributions. Capital appropriations have been designated as contributions by owners according to Treasurer’s Instruction 955 Contribution by owners made to wholly owned public sector entities and have been credited directly to Contributed Equity.

The transfers of net assets to/from other agencies, other than as a result of a restructure of administrative arrangements, are designated as contributions by owners where the transfers are non-discretionary and non-reciprocal. See note 33 ‘Equity’.

(e) Income

Revenue recognition

Revenue is recognised and measured at the fair value of consideration received or receivable. Revenue is recognised for the major business activities as follows:

Sale of goods

Revenue is recognised from the sale of goods and disposal of other assets when the significant risks and rewards of ownership transfer to the purchaser and can be measured reliably.

Interest

Revenue is recognised as the interest accrues.

Service appropriations

Service appropriations are recognised as revenues at fair value in the period in which the department gains control of the appropriated funds. The department gains control of appropriated funds at the time those funds are deposited to the department’s bank account or credited to the ‘Amounts receivable for services’ (holding account) held at Treasury. See note 18 ‘Income from state government’ for further information.




Net appropriation determination

The Treasurer may make a determination providing for prescribed receipts to be retained for services under the control of the department. In accordance with the determination specified in the 2016/17 Budget Statements, the department retained $96.6m in 2017 ($93.1m in 2016) from the following:

– proceeds from fees and charges– sale of goods– Commonwealth – specific purpose grants and contributions– one-off gains with a value of less than $10,000 derived from the sale of property other than real property– revenues from services provided through the establishment of memorandum of understandings– other departmental revenue.

Grants, donations, gifts and other non-reciprocal contributions

Revenue is recognised at fair value when the department obtains control over the assets comprising the contributions, usually when cash is received.

Other non-reciprocal contributions that are not contributions by owners are recognised at their fair value. Contributions of services are only recognised when a fair value can be reliably determined and the services would be purchased if not donated.

Royalties for Regions funds are recognised as revenue at fair value in the period in which the department obtains control over the funds. The department obtains control of the funds at the time the funds are deposited into the department’s bank account.

Gains

Realised or unrealised gains are usually recognised on a net basis. These include gains arising on the disposal of non-current assets and some revaluations of non-current assets.

(f) Property, plant and equipment and infrastructure

Capitalisation/expensing of assets

Items of property, plant and equipment and infrastructure costing $5,000 or more are recognised as assets and the cost of utilising assets is expensed (depreciated) over their useful lives. Items of property, plant and equipment and infrastructure costing less than $5,000 are immediately expensed direct to the Statement of comprehensive income (other than where they form part of a group of similar items which are significant in total).




Initial recognition and measurement

Property, plant and equipment and infrastructure are initially recognised at cost.

For items of property, plant and equipment and infrastructure acquired at no cost or for nominal consideration, the cost is their fair value at the date of acquisition.

Subsequent measurement

Subsequent to initial recognition as an asset, the revaluation model is used for the measurement of land and buildings, and historical cost for all other property, plant and equipment and infrastructure. Land and buildings are carried at fair value less accumulated depreciation (buildings only) and accumulated impairment losses. All other items of property, plant and equipment and infrastructure are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Where market-based evidence is available, the fair value of land and buildings is determined on the basis of current market buying values determined by reference to recent market transactions.

In the absence of market-based evidence, fair value of land and buildings is determined on the basis of existing use. This normally applies where buildings are specialised or where land use is restricted. Where the fair value of buildings is determined on the depreciated replacement cost basis, the accumulated depreciation is restated proportionately with the change in the gross carrying amount of the asset. Fair value for existing use assets is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the depreciated replacement cost. Fair value for restricted use land is determined by comparison with market evidence for land with similar appropriate utility (high restricted use land) or market value of comparable unrestricted land (low restricted use land).

When buildings are revalued, the accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount.

Land and buildings are independently valued annually by Landgate and recognised annually to ensure that the carrying amount does not differ materially from the asset’s fair value at the end of the reporting period.

The most significant assumptions in estimating fair value are made in assessing whether to apply the existing use basis to assets and in determining estimated useful life. Professional judgement by the valuer is required where the evidence does not provide a clear distinction between market type assets and existing use assets.

Derecognition

Upon disposal or derecognition of an item of land and buildings, any revaluation surplus relating to that asset is retained in the asset revaluation surplus.




Asset revaluation surplus

The asset revaluation surplus is used to record increments and decrements on the revaluation of non-current assets as described in note 28 ‘Property, plant and equipment’.

Depreciation

All non-current assets having a limited useful life are systematically depreciated over their estimated useful lives in a manner that reflects the consumption of their future economic benefits.

Depreciation is calculated using the straight line method, using rates which are reviewed annually. Estimated useful lives for each class of depreciable asset are:

Asset category Life (years)

Buildings 20 to 40 and/or estimated useful life

Computer and communications equipment 3 to 5

Office and other equipment 5 to 10

Plant and machinery 5 to 20

Vehicles and buses 5 to 10

Infrastructure 20 to 50

Land is not depreciated.

(g) Intangible assets

Capitalisation/expensing of assets

Acquisitions of intangible assets costing $5,000 or more and internally generated intangible assets costing $50,000 or more are capitalised. The cost of utilising the assets is expensed (amortised) over their useful lives. Costs incurred below these thresholds are immediately expensed directly to profit or loss in the Statement of comprehensive income.

All acquired and internally developed intangible assets are initially recognised at cost. For assets acquired at no cost or for nominal cost, the cost is their fair value at the date of acquisition.

Subsequent to initial recognition, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses.

Amortisation for intangible assets with finite useful lives is calculated for the period of the expected benefit (estimated useful life which is reviewed annually) on the straight line basis. All intangible assets controlled by the department have a finite useful life and zero residual value.




The expected useful lives for each class of intangible asset are:

Asset category Life (years)Licences up to 10 Development costs 3 to 5 Software

(a) 3 to 5 Website costs 3 to 5 (a) Software that is not integral to the operation of any related hardware.

Licences

Licences have a finite useful life and are carried at cost less accumulated amortisation and accumulated impairment losses.

Development costs

Research costs are expensed as incurred. Development costs incurred for an individual project are carried forward when the future economic benefits can reasonably be regarded as assured and the total project costs are likely to exceed $50,000. Other development costs are expensed as incurred.

Computer software

Software that is an integral part of the related hardware is treated as property, plant and equipment. Software that is not an integral part of the related hardware is treated as an intangible asset. Software costing less than $5,000 is expensed in the year of acquisition.

Website costs

Website costs are charged as expenses when they are incurred unless they relate to the acquisition or development of an asset when they may be capitalised and amortised. Generally, costs in relation to feasibility studies during the planning phase of a website, and ongoing costs of maintenance during the operating phase are expensed. Costs incurred in building or enhancing a website, to the extent that they represent probable future economic benefits that can be reliably measured, are capitalised.

(h) Impairment of assets

Property, plant, equipment and infrastructure are tested for any indication of impairment at the end of each reporting period. Where there is an indication of impairment, the recoverable amount is estimated. Where the recoverable amount is less than the carrying amount, the asset is considered impaired and is written down to the recoverable amount and an impairment loss is recognised. As the department is a not-for-profit entity, unless an asset has been identified as a surplus asset, the recoverable amount is the higher of an asset’s fair value less costs to sell and depreciated replacement cost.




The risk of impairment is generally limited to circumstances where an asset’s depreciation is materially understated, where the replacement cost is falling or where there is a significant change in useful life. Each relevant class of assets is reviewed annually to verify that the accumulated depreciation/amortisation reflects the level of consumption or expiration of the asset’s future economic benefits and to evaluate any impairment risk from falling replacement costs.

Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment at the end of each reporting period irrespective of whether there is any indication of impairment.

The recoverable amount of assets identified as surplus assets is the higher of fair value less costs to sell and the present value of future cash flows expected to be derived from the asset. Surplus assets carried at fair value have no risk of material impairment where fair value is determined by reference to market-based evidence. Where fair value is determined by reference to depreciated replacement cost, surplus assets are at risk of impairment and the recoverable amount is measured. Surplus assets at cost are tested for indications of impairment at the end of each reporting period.

(i) Assets classified as held for distribution to owners

Assets held for distribution to owners are recognised at the lower of carrying amount and fair value less costs to sell, and are disclosed separately from other assets in the Statement of financial position. Assets classified as held for distribution to owners are not depreciated or amortised.

All Crown land holdings are vested in the department by the government. The Department of Lands (DoL) is the only agency with the power to sell Crown land. The department transfers the Crown land and any attached buildings to DoL when the land becomes available for sale.

(j) Leases

Operating leases are expensed on a straight line basis over the lease term as this represents the pattern of benefits derived from the leased properties.

(k) Financial instruments

In addition to cash, the department has three categories of financial instrument:

• Loans and receivables• Available for sale financial instruments• Financial liabilities measured at amortised costs




Financial instruments have been disaggregated into the following classes:

• Financial assets

– Cash and cash equivalents– Restricted cash and cash equivalents– Receivables– Amounts receivable for services– Available for sale financial assets

• Financial liabilities

– Payables

Initial recognition and measurement of financial instruments is at fair value which normally equates to the transaction cost or the face value. Subsequent measurement is at amortised cost using the effective interest method, with the exception of available for sale financial assets which are measured at fair value with movements recognised in other comprehensive income.

The fair value of short-term receivables and payables is the transaction cost or the face value because there is no interest rate applicable and subsequent measurement is not required as the effect of discounting is not material.

(l) Cash and cash equivalents

For the purpose of the Statement of cash flows, cash and cash equivalent (and restricted cash and cash equivalent) assets comprise cash on hand and short-term deposits with original maturities of three months or less that are readily convertible to a known amount of cash and which are subject to insignificant risk of changes in value.

(m) Accrued salaries

Accrued salaries (see note 31 ‘Payables’) represent the amount due to staff but unpaid at the end of the financial year. Accrued salaries are settled within a fortnight of the financial year end. The department considers the carrying amount of accrued salaries to be equivalent to its fair value.

The accrued salaries suspense account (see note 20 ‘Restricted cash and cash equivalents’) consists of amounts paid annually, from departmental appropriations for salaries expense, into a Treasury suspense account over a period of 10 financial years to largely meet the additional cash outflow for employee salary payments every 11th financial year when 27 pay days occur instead of the normal 26. No interest is received on this account.




(n) Amounts receivable for services (holding account)

The department receives funding on an accrual basis. The appropriations are paid partly in cash and partly as an asset (holding account receivable). The accrued amount receivable is accessible on the emergence of the cash funding requirement to cover leave entitlements and asset replacement.

See also note 18 ‘Income from state government’ and note 24 ‘Amounts receivable for services (holding account)’.

(o) Inventories and biological assets

Inventories are measured at the lower of cost and net realisable value. The cost of inventory is based on the first-in first-out basis. Biological assets comprising livestock and field crops are valued at fair value less estimated point of sale costs and costs necessary to get them to market. A gain or loss on valuation is recognised in the Statement of comprehensive income. See note 21 ‘Biological assets’.

Inventories not held for resale are measured at cost unless they are no longer required, in which case they are valued at net realisable value. See note 22 ‘Inventories’.

(p) Receivables

Receivables are recognised at original invoice amount less an allowance for any uncollectible amounts (i.e. impairment). The collectability of receivables is reviewed on an ongoing basis and any receivables identified as uncollectible are written off against the allowance account. The allowance for uncollectible amounts (doubtful debts) is raised when there is objective evidence that the department will not be able to collect the debts. The carrying amount is equivalent to fair value as it is due for settlement within 30 days. See also note 44 ‘Financial instruments’ and note 23 ‘Receivables’.

(q) Payables

Payables are recognised at the amounts payable when the department becomes obliged to make future payments as a result of a purchase of assets or services. The carrying amount is equivalent to fair value, as they are generally settled within 30 days. See also note 44 ‘Financial instruments’ and note 31 ‘Payables’.

(r) Provisions

Provisions are liabilities of uncertain timing and amount and are recognised where there is a present legal or constructive obligation as a result of a past event and when the outflow of resources embodying economic benefits is probable and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at the end of each reporting period. See also note 32 ‘Provisions’.

(i) Provisions – Employee benefits

All annual leave and long service leave provisions are in respect of employees’ services up to the end of the reporting period.




Annual leave

Annual leave is not expected to be settled wholly within 12 months after the end of the reporting period and is therefore considered to be ‘other long-term employee benefits’. The annual leave liability is recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

When assessing expected future payments, consideration is given to expected future wage and salary levels including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

The provision for annual leave is classified as a current liability as the department does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Long service leave

Long service leave is not expected to be settled wholly within 12 months after the end of the reporting period and is therefore recognised and measured at the present value of amounts expected to be paid when the liabilities are settled using the remuneration rate expected to apply at the time of settlement.

When assessing expected future payments, consideration is given to expected future wage and salary levels, including non-salary components such as employer superannuation contributions, as well as the experience of employee departures and periods of service. The expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

Unconditional long service leave provisions are classified as current liabilities as the department does not have an unconditional right to defer the settlement of the liability for at least 12 months after the end of the reporting period. Pre-conditional and conditional long service leave provisions are classified as non-current liabilities because the department has an unconditional right to defer the settlement of the liability until the employee has completed the requisite years of service.

Sick leave

Liabilities for sick leave are recognised when it is probable that sick leave paid in the future will be greater than the entitlement that will accrue in the future.

Past history indicates that on average, sick leave taken each reporting period is less than the entitlement accrued. This is expected to continue in future periods. Accordingly, it is unlikely that existing accumulated entitlements will be used by employees and no liability for unused sick leave entitlements is recognised. As sick leave is non vesting, an expense is recognised in the Statement of comprehensive income for this leave as it is taken.




Deferred leave

The provision for deferred leave relates to public service employees who have entered into an agreement to self-fund an additional 12 months’ leave in the fifth year of the agreement. The provision recognises the value of salary set aside for employees to be used in the fifth year. This liability is measured on the same basis as annual leave. Deferred leave is reported as a current provision as employees can leave the scheme at their discretion at any time.

Purchased leave

The provision for purchased leave relates to public service employees who have entered into an agreement to self-fund up to an additional 10 weeks’ leave per calendar year. The provision recognises the value of salary set aside for employees and is measured at the nominal amounts expected to be paid when the liabilities are settled. This liability is measured on the same basis as annual leave.

Superannuation

The Government Employees Superannuation Board (GESB) and other fund providers administer public sector superannuation arrangements in Western Australia in accordance with legislative requirements. Eligibility criteria for membership in particular schemes for public sector employees varies according to commencement and implementation dates.

Eligible employees contribute to the Gold State Superannuation Scheme (GSS), a defined benefit lump sum scheme closed to new members since 1995.

Employees commencing employment prior to 16 April 2007 who were not members of the GSS became non-contributory members of the West State Superannuation Scheme (WSS). Employees commencing employment on or after 16 April 2007 became members of the GESB Super Scheme (GESBS). From 30 March 2012, existing members of the WSS or GESBS and new employees became able to choose their preferred superannuation fund.

The department makes concurrent contributions to GESB or other funds on behalf of employees in compliance with the Commonwealth Government’s Superannuation Guarantee (Administration) Act 1992. Contributions to these accumulation schemes extinguish the department’s liability for superannuation charges in respect of employees who are not members of the GSS Scheme.

The pre-transfer benefit for employees who transferred to the GSS is a defined benefit scheme. These benefits are wholly unfunded and the liabilities for future payments are provided at the end of the reporting period. The liabilities under the GSS are calculated annually by actuaries using the projected unit credit method.

The expected future payments are discounted to present value using market yields at the end of the reporting period on national government bonds with terms to maturity that match, as closely as possible, the estimated future cash outflows.

The GSS, the WSS and the GESB, where the current service superannuation charge is paid by the department to the GESB, are defined contribution schemes. The liabilities for current service superannuation charges under the GWS, the WSS and the GESB schemes are extinguished by the concurrent payment of employer contributions to the GESB.




The GSS is a defined benefit scheme for the purposes of employees and whole-of-government reporting. However, from an agency perspective, apart from the pre-transfer benefits, it is a defined contribution plan under AASB 119.

(ii) Provisions – Other

Employment on-costs

Employment on-costs, including workers’ compensation insurance, are not employee benefits and are recognised separately as liabilities and expenses when the employment to which they relate has occurred. Employment on-costs are included as part of ‘Other expenses’ and are not included as part of the department’s ‘Employee benefits expense’. The related liability is included in ‘Employment on-costs provision’. See notes 10 ‘Other expenses’ and 32 ‘Provisions’.

(s) Superannuation expense

The superannuation expense is recognised in the Statement of comprehensive income in profit or loss for defined contribution plans, including the concurrent payment of employer contributions to the GSS scheme, as and when the contributions fall due.

For defined benefits plans (being the pre-transfer component of the GSS), changes in the defined benefit obligation are recognised in the Statement of comprehensive income either in profit or loss, or other comprehensive income as follows:

Profit or loss:

– current service cost– past service cost– interest cost

Other comprehensive income:

– actuarial gains and losses

(t) Resources received free of charge or for nominal cost

Assets or services received free of charge or for nominal cost are recognised as income at the fair value of the assets and/or the fair value of those services that can be reliably measured and the department would otherwise pay for. A corresponding expense is recognised for services received. Receipts of assets are recognised in the Statement of financial position.

Assets or services received from other state government agencies are separately disclosed under Income from state government in the Statement of comprehensive income.




(u) Joint arrangements

The department has interests in a number of joint arrangements, some of which are classified as joint operations and others as joint ventures.

A joint operation is an arrangement in which the department has joint control, whereby the department has direct rights to its assets and obligations for its liabilities. The department recognises its share of any joint operation assets and liabilities to the extent of its interest (refer to note 43).

A joint venture is an arrangement in which the department has joint control, whereby the department has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The department recognises its investment in joint ventures using the equity method of accounting (refer to note 27).

(v) Comparative figures

Comparative figures are, where appropriate, reclassified to be comparable with the figures presented in the current financial year.

(w) Memorandum of understanding

During the year, the department had a memorandum of understanding with the Agricultural Produce Commission and the Rural Business Development Corporation. The objective of these arrangements is to establish the types and standards of services to be provided, the basis for determining the level and the costs of services and responsibilities of the parties to the memorandum.

3 Judgements made by management in applying accounting policies

In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application of the department’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the following notes:

Note 27 and 43 – Classification of joint arrangements




4 Key sources of estimation uncertainty

Key estimates and assumptions concerning the future are based on historical experience and various other factors that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year, and are detailed in the following notes:

Note 37 – Contaminated sitesNote 29 – Land and buildings measured at fair value

Measurement of fair values

A number of the department’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

Landgate provide valuation services for the department’s land and buildings. The department provides the remaining useful life and depreciated book value to Landgate to assist them in their calculation of Level 3 fair value. When measuring the fair value of an asset or a liability, the department uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities

• Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs)

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The department recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.




5 Disclosure of changes in accounting policy and estimates

Initial application of an Australian Accounting Standard

The department has applied the following Australian Accounting Standards effective, or adopted, for annual reporting periods beginning on or after 1 July 2016 that impacted on the department.

AASB 1057 Application of Australian Accounting Standards This standard lists the application paragraphs for each other standard (and interpretation), grouped where they are the same. There is no financial impact.

AASB 2014-3 Amendments to Australian Accounting Standards—Accounting for Acquisitions of Interests in Joint Operations [AASB 1 and 11]The department establishes joint operations in pursuit of its objectives and does not routinely acquire interests in joint operations. Therefore, there is no financial impact on application of the standard.

AASB 2014-4 Amendments to Australian Accounting Standards—Clarification of Acceptable Methods of Depreciation and Amortisation [AASB 116 and 138]The adoption of this standard has no financial impact for the department as depreciation and amortisation is not determined by reference to revenue generation, but by reference to consumption of future economic benefits.

AASB 2014-9 Amendments to Australian Accounting Standards—Equity Method in Separate Financial Statements [AASB 1, 127 and 128]This standard amends AASB 127, and consequentially amends AASB 1 and AASB 128, to allow entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements. As the department already follows the equity method of accounting for joint ventures and associates, the application of the standard has no financial impact.

AASB 2015-1 Amendments to Australian Accounting Standards—Annual Improvements to Australian Accounting Standards 2012-2014 Cycle [AASB 1, 2, 3, 5, 7, 11, 110, 119, 121, 133, 134, 137 and 140]These amendments arise from the issuance of International Financial Reporting Standard Annual Improvements to IFRSs 2012-2014 Cycle in September 2014 and editorial corrections. The department has determined that the application of the standard has no financial impact.




AASB 2015-2 Amendments to Australian Accounting Standards—Disclosure Initiative: Amendments to AASB 101 [AASB 7, 101, 134 and 1049]This standard amends AASB 101 to provide clarification regarding the disclosure requirements in AASB 101. Specifically, the standard proposes narrow-focus amendments to address some of the concerns expressed about existing presentation and disclosure requirements and to ensure entities are able to use judgement when applying a standard in determining what information to disclose in their financial statements. There is no financial impact.

AASB 2015-6 Amendments to Australian Accounting Standards—Extending Related Party Disclosures to Not-for-Profit Public Sector Entities [AASB 10, 124 and 1049]The amendments extend the scope of AASB 124 to include application by not-for-profit public sector entities. Implementation guidance is included to assist application of the standard by not-for-profit public sector entities. There is no financial impact.

AASB 2015-10 Amendments to Australian Accounting Standards—Effective Date of Amendments to AASB 10 and 128This standard defers the mandatory effective date (application date) of amendments to AASB 10 and 128 that were originally made in AASB 2014-10 so that the amendments are required to be applied for annual reporting periods beginning on or after 1 January 2018 instead of 1 January 2016. There is no financial impact.

Future impact of Australian Accounting Standards not yet operative

The department cannot early adopt an Australian Accounting Standard unless specifically permitted by TI 1101 Application of Australian Accounting Standards and Other Pronouncements or by an exemption from TI 1101. By virtue of a limited exemption, the department has early adopted AASB 2015-7 Amendments to Australian Accounting Standards—Fair Value Disclosures of Not-for-Profit Public Sector Entities. Where applicable, the department plans to apply the following Australian Accounting Standards from their application date.


5 Disclosure of changes in accounting policy and estimates (continued)



Operative for reporting periods beginning on/after

AASB 9 Financial instruments 1 Jan 2018

This standard supersedes AASB 139 Financial Instruments: Recognition and Measurement, introducing a number of changes to accounting treatments.

The mandatory application date of this standard is currently 1 January 2018 after being amended by AASB 2012-6, AASB 2013-9 and AASB 2014-1 Amendments to Australian Accounting Standards. The department has not yet finalised the application or the potential impact of the standard. The standard moves to an ‘expected loss model’ approach to calculating impairment provisions. No material financial impact is expected as the department already calculates the impairment provision on a prospective basis.

AASB 15 Revenue from Contracts with Customers 1 Jan 2019

This standard establishes the principles that the department shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

The department’s income is principally derived from appropriations which will be measured under AASB 1058 income of not-for-profit entities and will be unaffected by this change. However, the department has not yet determined the potential impact of the standard on ‘user charges and fees’ and ‘sales revenues’. In broad terms, it is anticipated that the terms and conditions attached to these revenues will defer revenue recognition until the department has discharged its performance obligations.

AASB 16 LeasesThis standard introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value.

The department currently discloses its future lease commitments up to five years. Upon application of the standard, the present value of the non-cancellable lease payments will be recognised as a liability on the department’s balance sheet. A right-to-use asset will also be recognised at the value of the non-cancellable lease payments plus any additional direct costs associated with the lease.

The right to use asset will be depreciated over the lease term and any changes in the fair value of the lease liability will flow through to the income statement as an interest charge in the period.

1 Jan 2019



Future impact of Australian Accounting Standards not yet operative (continued)




AASB 1058 Income of Not-for-Profit Entities 1 Jan 2019

This standard clarifies and simplifies the income recognition requirements that apply to not-for-profit (NFP) entities, more closely reflecting the economic reality of NFP entity transactions that are not contracts with customers. Timing of income recognition is dependent on whether such a transaction gives rise to a liability or other performance obligation (a promise to transfer a good or service), or a contribution by owners, related to an asset (such as cash or another asset) received by an entity. The department has not yet determined the application or the potential impact of the standard.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 and 1038 and Int 2, 5, 10, 12, 19 and 127]

1 Jan 2018

This standard makes consequential amendments to other Australian Accounting Standards and Interpretations as a result of issuing AASB 9 in December 2010.

The mandatory application date of this standard has been amended by AASB 2012-6 and AASB 2014-1 to 1 January 2018. The department has not yet determined the application or the potential impact of the standard.

AASB 2014-1 Amendments to Australian Accounting Standards 1 Jan 2018Part E of this standard makes amendments to AASB 9 and consequential amendments to other standards. It has not yet been assessed by the department to determine the application or potential impact of the standard.

AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 1 Jan 2018This standard gives effect to the consequential amendments to Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 15. The department has not yet determined the application or the potential impact of the standard.

AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) 1 Jan 2018

This standard gives effect to the consequential amendments to Australian Accounting Standards (including interpretations) arising from the issuance of AASB 9 (December 2014). The department has not yet determined the application or the potential impact of the standard.







AASB 1058 Income of Not-for-Profit Entities 1 Jan 2019

This standard clarifies and simplifies the income recognition requirements that apply to not-for-profit (NFP) entities, more closely reflecting the economic reality of NFP entity transactions that are not contracts with customers. Timing of income recognition is dependent on whether such a transaction gives rise to a liability or other performance obligation (a promise to transfer a good or service), or a contribution by owners, related to an asset (such as cash or another asset) received by an entity. The department has not yet determined the application or the potential impact of the standard.

AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 and 1038 and Int 2, 5, 10, 12, 19 and 127]

1 Jan 2018

This standard makes consequential amendments to other Australian Accounting Standards and Interpretations as a result of issuing AASB 9 in December 2010.

The mandatory application date of this standard has been amended by AASB 2012-6 and AASB 2014-1 to 1 January 2018. The department has not yet determined the application or the potential impact of the standard.

AASB 2014-1 Amendments to Australian Accounting Standards 1 Jan 2018Part E of this standard makes amendments to AASB 9 and consequential amendments to other standards. It has not yet been assessed by the department to determine the application or potential impact of the standard.

AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 1 Jan 2018This standard gives effect to the consequential amendments to Australian Accounting Standards (including Interpretations) arising from the issuance of AASB 15. The department has not yet determined the application or the potential impact of the standard.

AASB 2014-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2014) 1 Jan 2018

This standard gives effect to the consequential amendments to Australian Accounting Standards (including interpretations) arising from the issuance of AASB 9 (December 2014). The department has not yet determined the application or the potential impact of the standard.


AASB 2014-10 Amendments to Australian Accounting Standards—Sale or Contribution of Assets between an Investor and its Associate or Joint Venture [AASB 10 and 1281]

1 Jan 2018

This standard amends AASB 10 and AASB 128 to address an inconsistency between the requirements in AASB 10 and those in AASB 128 (August 2011), in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

The mandatory application date of this standard has been amended by AASB 2015 10 to 1 January 2018. While the department has an interest in joint ventures and associates, the application of the standard is not expected to have a material financial impact.

AASB 2015-8 Amendments to Australian Accounting Standards—Effective Date of AASB 15 1 Jan 2017

This standard amends the mandatory effective date (application date) of AASB 15 Revenue from Contracts with Customers so that AASB 15 is required to be applied for annual reporting periods beginning on or after 1 January 2018 instead of 1 January 2017. The department has not yet determined the application or the potential impact of AASB 15.

AASB 2016-2 Amendments to Australian Accounting Standards—Disclosure Initiative: Amendments to AASB 107 1 Jan 2017

This standard amends AASB 107 Statement of Cash Flows (August 2015) to require disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. There is no financial impact.

AASB 2016-3 Amendments to Australian Accounting Standards—Clarifications to AASB 15 1 Jan 2018

This standard clarifies identifying performance obligations, principal versus agent considerations, timing of recognising revenue from granting a licence, and provides further transitional provisions to AASB 15. The department has not yet determined the application or the potential impact.

AASB 2016-4 Amendments to Australian Accounting Standards—Recoverable Amount of Non-Cash-Generating Specialised Assets of Not-for-Profit Entities

1 Jan 2017

This standard clarifies that the recoverable amount of primarily non-cash-generating assets of not-for-profit entities, which are typically specialised in nature and held for continuing use of their service capacity, is expected to be materially the same as fair value determined under AASB 13 Fair Value Measurement. The department has not yet determined the application or the potential impact.







AASB 2016-7 Amendments to Australian Accounting Standards—Deferral of AASB 15 for Not-for-Profit Entities 1 Jan 2017

This standard amends the mandatory effective date of AASB 15 for not-for-profit entities so that AASB 15 is required to be applied by such entities for annual reporting periods beginning on or after 1 January 2019 instead of 1 January 2018. There is no financial impact.

AASB 2016-8 Amendments to Australian Accounting Standards—Australian Implementation Guidance for Not-for-Profit Entities

1 Jan 2019

This standard inserts Australian requirements and authoritative implementation guidance for not-for-profit entities into AASB 9 and AASB 15. This guidance assists not-for-profit entities in applying those standards to particular transactions and other events. There is no financial impact.

AASB 2017-2 Amendments to Australian Accounting Standards—Further Annual Improvements 2014-2016 Cycle 1 Jan 2017

This standard clarifies the scope of AASB 12 by specifying that the disclosure requirements apply to an entity’s interests in other entities that are classified as held for sale, held for distribution to owners in their capacity as owners or discontinued operations in accordance with AASB 5. There is no financial impact.






2017 2016

6 Employee benefits expense $’000 $’000 Wages and salaries(a)(b) 85,570 82,210 Superannuation—defined contribution plans(c) 10,036 9,644 Long service leave 1,592 2,228 Annual leave 8,524 10,219 Other related expenses 4,593 4,409 110,315 108,710

(a) Includes the value of the fringe benefit to the employee plus the fringe benefit tax component, leave entitlements including superannuation contribution component.

(b) Voluntary severance expenditure $2,426,500 (2016: $3,774,000).

(c) Defined contribution plans include West State, Gold State and GESB Super Scheme (contributions paid).

Employment on-costs expenses are included at note 10 ‘Other expenses’.

Employment on-costs liability is included at note 32 ‘Provisions’.

7 Compensation of key management personnel

The department has determined that key management personnel include Cabinet Ministers and senior officers of the department. However, the department is not obligated to reimburse for the compensation of Ministers and therefore no disclosure is required. The disclosures in relation to Ministers’ compensation may be found in the Annual Report on State Finances.

Total compensation of senior officers of the department for the reporting period is presented within the following bands: Compensation band ($) 2017 2016 0 – 190,000 1 2 210,001 – 220,000 1 3 220,001 – 230,000 4 2 240,001 – 250,000 - - 280,001 – 290,000 - 1 350,001 – 360,000 - - 360,001 – 370,000 1 -

$’000 $’000 Short-term employee benefits 1,496 1,508 Post-employment benefits 170 174 Other long-term benefits - - Termination benefits - -

Total compensation of senior officers 1,666 1,682




Notes to the financial statements for the year ended 30 June 2017 2017 2016

8 Supplies and services $’000 $’000

Professional services(a) (b) 11,955 31,512 Travel 3,219 3,270 Communications 1,623 1,664 Consumables 12,271 9,744 Lease, rent and hire costs 3,359 4,027 Consultancies expense 1,663 1,940 Utilities, rates and charges 2,413 2,545 Insurance 651 722 Licences, fees and registration 2,297 1,878 Advertising 310 398 General administration costs 4,192 3,465 43,953 61,165

(a) Professional services expenses in 2017 have been reduced by $11.7m as a result of the recognition of a capital work-in-progress asset relating to the Gascoyne Food Bowl Initiative. The Gascoyne Food Bowl Initiative is a Royalties for Regions project which commenced in the year to 30 June 2012. It is about the development of land and water infrastructure for a sustainable enlarged irrigation precinct to enable horticulture expansion in Carnarvon. The water infrastructure associated with the Gascoyne Food Bowl Initiative was to be granted to the Gascoyne Water Cooperative and as such all costs associated with the project have been expensed historically. However, during the current year to 30 June 2017 a decision was made to delay this transfer indefinitely and the state government through the department will retain ownership and control. The department has therefore recognised the fair value of the water infrastructure as a work-in-progress asset on its balance sheet with a corresponding reduction in current year professional services costs. The $11.7m is the value of professional services costs expensed in prior years and the total value of the asset recognised is $15.2m including current year costs of $3.5m. The project is expected to reach practical completion in the year to 30 June 2018 when the work-in-progress asset will be transferred to fixed assets under the infrastructure category and depreciated over a useful life of 50 years.

(b) Includes audit fee, see also note 40 ‘Remuneration of auditors’.



2017 2016

9 Depreciation and amortisation expense $’000 $’000

Depreciation Buildings 3,237 6,273 Computer and communications equipment 697 1,462 Office and other equipment 96 76 Plant and machinery 2,212 1,840 Infrastructure 481 472 Vehicles and buses 218 321 Total depreciation 6,941 10,444 Amortisation Intangible assets 984 959 Total amortisation 984 959 Total depreciation and amortisation expense 7,925 11,403

2017 2016

10 Other expenses $’000 $’000

Doubtful debts expense 4 (467)Employment on-costs 628 1,152 Return of unused grants 4,720 603 Miscellaneous other 1,539 283

6,891 1,571

2017 2016

11 Grants and subsidies paid $’000 $’000

Recurrent Grant payments 27,140 18,774 Donations and sponsorships 165 340

27,305 19,114





12 Related party transactions

The department is a wholly-owned public sector entity that is controlled by the state of Western Australia.

Related parties of the department include:

• all Ministers and their close family members, and their controlled or jointly controlled entities• all senior officers and their close family members, and their controlled or jointly controlled entities• other departments and statutory authorities, including their related bodies, that are included in the whole-of-government consolidated

financial statements• associates and joint ventures of an entity that are included in the whole-of-government consolidated financial statements• the Government Employees Superannuation Board (GESB).

Significant transactions with government-related entities

Significant transactions include:

• service appropriation (refer summary of consolidated account appropriations and income estimates)• capital appropriation (refer summary of consolidated account appropriations and income estimates)• services received free of charge from various state agencies (Note 18)• services provided free of charge to various state agencies (Note 35)• Royalties for Regions Fund (Note 18)• superannuation payments to GESB (Note 6)• lease rental receipts from the Department of Parks and Wildlife (Merredin) of $52,360• lease rental receipts from the Forest Products Commission of $166,071• lease rental receipts from Midwest Ports of $123,530• lease rentals payments to the Department of Finance (State Fleet) of $1,743,462 • regional accommodation lease payments to the Department of Housing of $800,378• licensing fees paid to the Department of Lands of $62,685• unspent grant payments returned to the Department of Regional Development of $136,760 • unspent grant receipts returned from the Department of Water of $1,899,873• reimbursement of international Agribusiness Development Managers to the Department of State Development of $508,594• insurance recoveries from RiskCover of $288,574• vehicle registrations payable to the Department of Transport of $161,518• regional utility expenses payable to Horizon Power of $239,801• regional support services payable to the Pilbara Development Commission of $88,000




12 Related party transactions (continued)

• utility expenses payable to Synergy of $512,891• advisory services payable to the Public Sector Commission of $77,582• utility charges payable to the Water Corporation of $297,397• fees collected on behalf of the Agricultural Produce Commission of $281,313 • construction and project management fees paid to the Department of Finance of $11,929,003• remuneration for services provided by the Auditor General (note 40).

Material transactions with related parties

During the year the department increased its shareholding in InterGrain Pty Ltd (InterGrain) through the purchase of 4,770,471 shares from Monsanto Australia Limited (Monsanto) for $1,430,000. In addition to the purchase of shares the department also purchased a convertible preference note that Monsanto held in InterGrain for the face value of $3,000,000. The department now holds a 61.67% equity interest in InterGrain as set out in note 27.

The department also paid InterGrain $275,000 for the final two milestone payments under the Barley Research Collaboration Agreement.

There are no other material transactions with related parties.

2017 2016

13 User charges and fees $’000 $’000

User charges and fees 11,915 10,054 Memorandum of understanding—services provided Agricultural Produce Commission 651 593 Rural Business Development Corporation 501 714 13,067 11,361

2017 2016

14 Commonwealth grants and contributions $’000 $’000

Commonwealth National Partnership Agreements 1,599 1,459 Commonwealth Agriculture Activity Grants 1,658 2,071 Other grants from the Commonwealth 132 -

3,389 3,530




2017 2016

15 Grants and subsidies received $’000 $’000

Agriculture Research Grants Account No. 1 Rural industry research funds - -

Meat and Livestock Australia 1,248 1,048 Grains Research and Development Corporation 12,852 16,328 Rural Industry Research and Development Corporation 593 489 Australian Wool Innovation Pty Ltd 92 - Australian Centre for International Agricultural Research - 38 Cooperative Research Centres research grants 507 747 Commercial grants 4,979 5,852

Agriculture Research Grants Account No. 2 Horticulture industry 243 918 Other grants and subsidies - 630 Miscellaneous grants 268 233

Total grants and subsidies from non-government sources 20,782 26,283

2017 2016

16 Other revenue $’000 $’000

Levies, rates and licences 6,331 4,994 Return of grant allocations 25 1,011 Royalties 1,336 2,579 Rents and leases 1,845 1,617 Other 1,791 2,457

11,328 12,658



2017 2016

17 Net gain/(loss) on disposal of non-current assets $’000 $’000

Proceeds from disposal of non-current assets Land - 2,110 Buildings - - Non-current assets classified as held for distribution to owners - 651 Computer and communications equipment - -Vehicles and buses - 82 Infrastructure - -Plant and machinery 2 47 Available for sale financial assets - 536 2 3,426 Carrying amount of non-current assets disposed Land - 2,110 Buildings 1,148 51 Non-current assets classified as held for distribution to owners - 651 Computer and communications equipment 14 -Office equipment 2 -Vehicles and buses - 10 Infrastructure - -Plant and machinery 78 52 Available for sale financial assets - 536 1,242 3,410 Net (loss)/gain (1,240) 16





18 Income from state government 2017 2016Appropriation received during the period: $’000 $’000Service appropriation(a) 116,535 121,924 Resources received free of charge(b) Landgate 281 537 State Solicitor’s Office 316 170 Department of Finance 29 241 Department of Water - 17 626 965 Royalties for Regions fund:(c) through Department of Water 2,142 1,728 Regional community services fund Boosting Grains Research and Development (R&D) 3,965 675 eConnected Grainbelt - 2,512 Regional Men’s Health Initiative 800 800 Regional Workers Incentives Allowance Payments 181 230 Wild Dog Management Program 750 466 Wild Dog Action Plan 760 -Potato Industry Adjustment 12,820 -Seizing the Opportunity Agriculture Agricultural Science R&D 4,875 4,643 Asian Market Success 2,065 2,000 Boosting Biosecurity Defences 6,515 6,651 Food Industry Innovation 863 700 Northern Beef Futures 3,648 3,665 Sheep Industry Business Innovation 3,342 2,116 Regional infrastructure and headworks fund Gascoyne Food Bowl Initiative 1,926 5,504 New regional and statewide initiatives—Radar as an enabling technology project - 200 Pilbara cities strategic infrastructure—Pilbara Hinterland Agricultural Development Initiative 1,826 1,550 Regional natural resource management—Carbon farming - 834 Regional natural resource management—Water efficiency - 417 Regional economic development water opportunities—La Grange - 1,933 46,478 36,624 Total income from state government 163,639 159,513




(a) Service appropriations fund the net cost of services delivered. Appropriation revenue comprises a cash component and a receivable (asset). The receivable (holding account) comprises the budgeted depreciation expense for the year and any agreed increase in leave liabilities during the year.

(b) Assets or services received free of charge or for nominal cost are recognised as revenue at fair value of the assets and/or services that can be reliably measured and which would have been purchased if they were not donated. Contributions of assets or services in the nature of contributions by owners are recognised directly in equity.

(c) This is a sub-fund within the overarching ‘Royalties for Regions fund’. The recurrent funds are committed to projects and programs in WA regional areas.

2017 201619 Cash and cash equivalents $’000 $’000

Cash advances 17 25 Cash at bank 2,525 10,285 Cash and cash equivalents 2,542 10,310

2017 201620 Restricted cash and cash equivalents $’000 $’000

Current Royalties for Regions fund(a) 9,877 7,495 Potato Marketing Corporation 519 - Funds for capital purposes(b) 1,519 4,278 Special purpose accounts(c) Agriculture Research Grants Account No. 1 (non-interest bearing) 16,887 18,560 Agriculture Research Grants Account No. 2 3,151 4,103 Commonwealth Agriculture Activity Grants (non-interest bearing) 4,552 3,042 Declared Pest Account 2,794 1,917 Land Conservation Districts Fund 144 42 Plant Research and Development 11,391 10,342 Cattle Industry Funded Scheme 5,578 5,475 Grain, Seeds and Hay Industry Funded Scheme 9,756 7,740 Sheep and Goats Industry Funded Scheme 2,014 1,959 Total current 68,182 64,953 Non-current Accrued salaries suspense account(d) 245 -Total non-current 245 -Total restricted cash and cash equivalents 68,427 64,953

18 Income from state government (continued)




(a) Unspent funds are committed to projects and programs in WA regional areas.(b) Funds for capital purposes are restricted by the fact that these amounts are specifically appropriated by Treasury for capital spend.(c) Receipts and disbursements are disclosed in note 47 in accordance with Treasurer’s Instruction 1103(15).(d) Funds held in the suspense account are to be used only for the purpose of meeting the 27th pay in a financial year that occurs every 11 years.

2017 201621 Biological assets $’000 $’000

Livestock 686 665 Field crops 465 566

1,151 1,231

2017 201622 Inventories $’000 $’000

Inventories held for resale Raw materials and stores 633 573

633 573

2017 2016

23 Receivables $’000 $’000Current Receivables 2,905 2,967 Allowance for impairment of receivables (178) (288)Accrued revenue 27 35 GST receivable 1,078 2,376 Interest receivable 172 189 Total current receivables 4,004 5,279 Reconciliation of changes in the allowances for impairment of receivables: Balance at start of period 288 861 Doubtful debt expense 4 (467)Amounts written off during the period (114) (106)Balance at end of period 178 288

The department does not hold any collateral or other credit enhancements as security for receivables.

See also note 2(p) ‘Receivables’ and note 44 ‘Financial instruments’.

20 Restricted cash and cash equivalents (continued)



Notes to the financial statements for the year ended 30 June 20172017 2016

24 Amounts receivable for services (holding account) $’000 $’000

Current 2,589 3,975 Non-current 72,897 65,660 75,486 69,635

Represents the non-cash component of service appropriations. It is restricted in that it can only be used for asset replacement or payment of leave liability. See note 2(n) ‘Amounts receivable for services (holding account)’.

The reconciliation at the beginning and end of the current year and previous year is set out below. Opening balance of holding account 69,635 64,854 Non-cash appropriation 9,826 8,456 Departmental drawdown (3,975) (3,675)Closing balance of holding account 75,486 69,635

2017 2016

25 Other assets $’000 $’000

Current Lease rentals 34 95 Goods and services 45 969 Doppler radar maintenance 530 -Held for sale - -Registrations 551 715 Total current assets 1,160 1,779 Non-current Doppler radar 7,268 22,593 Goods and services 100 -Available for sale financial assets Unlisted shares 55 55 Total non-current assets 7,423 22,648




26 Assets classified as held for distribution to owners $’000 $’000Land and buildings Current 59,711 -Non-current 15,470 2,749 75,181 2,749 Opening balance 2,749 3,400 Revaluation of land and buildings distributed (3,230) -Assets reclassified as held for distribution to owners 75,982 -Total assets classified as held for distribution to owners 75,501 3,400 Less assets distributed (320) (651)Closing balance 75,181 2,749

2017 201627 Investments accounted for using the equity method $’000 $’000

Investment in joint ventures at initial cost of investment 31,014 29,212 Share of profit/(loss) using the equity method (28,160) (24,972)Recognition of gain on dilution 4,924 4,924 7,778 9,164 Loan to InterGrain Pty Ltd 3,891 287

11,669 9,451

The Western Australian Agriculture Authority (WAAA), a body corporate established under the Biosecurity and Agriculture Management Act 2007, is a joint venturer in:

InterGrain Pty Ltd InterGrain Pty Ltd was incorporated on 26 October 2007 and is resident in Australia. The principal activity of the joint venture is to commercialise the research from wheat and barley breeding. As at 30 June 2017, WAAA holds a 61.67% (2016: 48.67%) equity interest in InterGrain Pty Ltd. The department regards the investment in InterGrain Pty Ltd as a joint venture, due to the contractually agreed sharing of control over economic activity and the financial and operating decisions relating to the activity requiring the unanimous consent of the shareholders.

Australian Export Grains Innovation Centre Ltd (Limited by Guarantee) (AEGIC)AEGIC was incorporated on 24 October 2012. The primary aim of the joint venture is to lead the establishment and operation of a centre of science, technology and innovation to facilitate the competitiveness of the Australian grains industry with a particular focus on export markets.

The department has no obligations with respect to liabilities incurred by InterGrain Pty Ltd and AEGIC.



27 Investments accounted for using the equity method (continued)

Summary financials of equity accounted investees

Summary financials from the management accounts for equity accounted investees, not adjusted for the percentage ownership by the department:

2017 2016 $’000 $’000 $’000 $’000 InterGrain AEGIC InterGrain AEGIC

Current assets 10,673 12,671 5,274 20,923 Non-current assets 2,219 1,121 2,846 610 Total assets 12,892 13,792 8,120 21,533 Current liabilities 5,018 1,490 2,318 1,224 Non-current liabilities 8,312 - 7,074 -Total liabilities 13,330 1,490 9,392 1,224 Net (liabilities)/assets (438) 12,302 (1,272) 20,309 Revenue 14,639 2,690 6,988 3,413 Expenses (14,265) (10,602) (11,310) (10,266)Net gain/(loss) 374 (7,912) (4,322) (6,853)





28 Property plant and equipment $’000 $’000Land At fair value 49,777 130,009 Buildings At fair value 57,738 65,327 Accumulated depreciation (2,380) (6,339) 55,358 58,988 Computer and communications equipment At cost 8,376 10,175 Accumulated depreciation (7,452) (8,469) 924 1,706 Office and other equipment At cost 913 1,138 Accumulated depreciation (759) (939) 154 199 Plant and machinery At cost 47,592 35,449 Accumulated depreciation (27,128) (27,980) 20,464 7,469 Vehicles and buses At cost 10,356 10,683 Accumulated depreciation (10,009) (10,090) 347 593 Infrastructure At cost 11,385 11,215 Accumulated depreciation (3,630) (3,149) 7,755 8,066 Capital works in progress Buildings 3,130 940 Gascoyne Food Bowl Initiative 15,171 -Other - 263 18,301 1,203 Total property, plant and equipment 153,080 208,233




28 Property plant and equipment (continued)

Land Buildings

Computer and

communications

equipment

Office and other

equipment

Plant and machinery

Vehicles and buses

Infra- structure

Capital works in progress

Total

2017 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Carrying amount at start of period 130,009 58,988 1,706 199 7,469 593 8,066 1,203 208,233Additions - 3,995 5 22 498 12 74 17,685 22,291Disposals - (1,148) (5) (2) (9) - - - (1,164)Transfers(a) (73,942) (2,348) (76) 31 14,787 (40) 96 (587) (62,079)Revaluations increments (6,290) (892) - - - - - - (7,182)Depreciation - (3,237) (697) (96) (2,212) (218) (481) - (6,941)Write-off of assets - - (9) - (69) - - - (78)

Carrying amount at end of period 49,777 55,358 924 154 20,464 347 7,755 18,301 153,080

2016 Carrying amount at start of period 133,243 60,600 1,916 289 8,077 693 7,404 47 212,269 Additions 915 1,691 1,226 58 1,142 298 1,108 1,156 7,594 Disposals (2,110) (51) - - (52) (36) 26 - (2,223)Transfers(a) - - 26 (72) 142 (41) - - 55 Revaluations increments (2,039) 3,021 - - - - - - 982 Depreciation - (6,273) (1,462) (76) (1,840) (321) (472) - (10,444)Write-off of assets -

Carrying amount at end of period 130,009 58,988 1,706 199 7,469 593 8,066 1,203 208,233

(a) The balance in transfers includes transfers to assets held for distribution (note 26).




29 Fair value measurements Level 1 Level 2 Level 3Fair value at end of

period

2017 $’000 $’000 $’000 $’000Assets held for sale (note 26) - 25 75,156 75,181 Land (note 28) - 14,373 35,404 49,777 Buildings (note 28) - 2,972 52,386 55,358 - 17,370 162,946 180,316 2016 Non-current assets held for sale (note 26) - 345 2,404 2,749 Land (note 28) - 5,125 124,884 130,009 Buildings (note 28) - 3,266 55,722 58,988

- 8,736 183,010 191,746

Transfers into and transfers out of the fair value hierarchy level are recognised at the end of the financial reporting period. There were no transfers between Levels 1, 2 or 3 during the current period.

Valuation techniques to derive Level 2 fair values

Level 2 fair values of land and buildings are derived using the market approach. Market evidence of sales prices of comparable land and buildings in close proximity is used to determine price per square metre.

Non-current assets held for distribution to owners have been written down to fair value less costs to sell. Fair value has been determined by reference to market evidence of sales prices of comparable assets.




29 Fair value measurements (continued)

Fair value measurements using significant unobservable inputs (Level 3) The following table presents the changes in the fair value of assets measured using significant unobservable inputs (Level 3) for recurring fair value measurements:

Held for

saleLand Buildings

2017 $’000 $’000 $’000Fair value at start of period 2,404 124,884 55,722 Additions 82,712 - 3,995 Revaluation increments/(decrements) recognised in Other comprehensive income (3,230) (7,958) (827)Transfers (from/(to) Level 2) - (7,580) -Other transfers (6,310) (73,871) (2,777)Disposals - (71) (1,126)Depreciation expense (420) - (2,601)Fair value at end of period 75,156 35,404 52,386

2016 Fair value at start of period 2,965 127,540 57,063 Additions - 915 1,687 Revaluation increments/(decrements) recognised in Other comprehensive income - (1,461) 3,106 Other transfers - - (4)Disposals (561) (2,110) (51)Depreciation expense - - (6,079)Fair value at end of period 2,404 124,884 55,722




29 Fair value measurements (continued)

Information about significant unobservable inputs (Level 3) in fair value measurements

Valuation processes

There were no changes in valuation techniques during the period.

Transfers in and out of a fair value level are recognised on the date of the event or change in circumstances that caused the transfer. Transfers are generally limited to assets newly classified as non-current assets held for distribution as Treasurer’s instructions require valuations of land and buildings to be categorised within Level 3 where the valuations will utilise significant Level 3 inputs on a recurring basis.

Land (Level 3 fair values)

Fair value for restricted use land is based on comparison with market evidence for land with low level utility (high restricted use land). The relevant comparators of land with low level utility is selected by Landgate and represents the application of a significant Level 3 input in this valuation methodology. The fair value measurement is sensitive to values of comparator land, with higher values of comparator land correlating with higher estimated fair values of land.

Buildings (Level 3 fair values)

Fair value for existing use specialised buildings is determined by reference to the cost of replacing the remaining future economic benefits embodied in the asset, i.e. the depreciated replacement cost. Depreciated replacement cost is the current replacement cost of an asset less accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired economic benefit, or obsolescence, and optimisation (where applicable) of the asset. Current replacement cost is generally determined by reference to the market observable replacement cost of a substitute asset of comparable utility and the gross project size specifications.

The Level 3 input used in the valuation process is estimated by Landgate. The Level 3 input is based upon the estimated consumed economic benefit/obsolescence of the asset concerned. The fair value measurement is sensitive to the estimate of consumption/obsolescence, with higher values of the estimate correlating with lower estimated fair values of buildings and infrastructure.

Basis of valuation

In the absence of market-based evidence, due to the specialised nature of some non-financial assets, these assets are valued at Level 3 of the fair value hierarchy on an existing use basis. The existing use basis recognises that restrictions or limitations have been placed on their use and disposal when they are not determined to be surplus to requirements. These restrictions are imposed by virtue of the assets being held to deliver a specific community service.




30 Intangible assets $’000 $’000Computer software At cost 7,392 6,778 Accumulated amortisation (5,932) (4,948) 1,460 1,830 Capital works in progress At cost 2,837 1,006 Total intangible assets 4,297 2,836 Reconciliation Computer software Carrying amount at start of period 1,830 1,771 Additions 389 640 Transfers from capital works in progress 225 378 Amortisation expense (984) (959)Carrying amount at end of period 1,460 1,830 Capital works in progress Carrying amount at start of period 1,006 482 Additions 3,020 902 Provision for impairment (964) -Transfers from property, plant and equipment - -Transfers to computer software (225) (378)Carrying amount at end of period 2,837 1,006

2017 201631 Payables $’000 $’000

Current Trade payables 1,150 181 Accrued expenses 3,888 4,640 Accrued salaries 2,070 -Other payables 1,501 1,279 Total current 8,609 6,100

See also note 2(q) ‘Payables’ and note 44 ‘Financial instruments’.




32 Provisions $’000 $’000Current Annual leave(a) 8,629 10,230 Long service leave(b) 11,979 12,762 Total current employee benefits provision 20,608 22,992 Employee on-costs(c) 2,425 2,749 Total current other provisions 2,425 2,749 Total current provisions 23,033 25,741 Non-current Long service leave(b) 3,933 3,862 Total non-current employee benefits provision 3,933 3,862 Employee on-costs(c) 500 483 Total non-current other provisions 500 483 Total non-current provisions 4,433 4,345 (a) Annual leave liabilities have been classified as current as there is no unconditional right to defer

settlement for at least 12 months after the end of the reporting period. Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

2017 2016$’000 $’000

Within 12 months of the end of the reporting period 6,483 7,058 More than 12 months after the reporting period 2,146 3,172 8,629 10,230

(b) Long service leave liabilities have been classified as current where there is no unconditional right to defer settlement for at least 12 months after the end of the reporting period. Assessments indicate that actual settlement of the liabilities is expected to occur as follows:

Within 12 months of the end of the reporting period 4,490 4,577 More than 12 months after the reporting period 11,422 12,047 15,912 16,624

(c) The settlement of annual and long service leave liabilities gives rise to the payment of employment on-costs including workers’ compensation insurance. The provision is the present value of expected future payments. The associated expense, apart from the unwinding of the discount, is disclosed in note 10 ‘Other expenses’.




32 Provisions (continued) Movements in other provisions Movements in each class of provisions during the financial year, other than employee benefits are set out below:

2017 2016Employment on-cost provision $’000 $’000Carrying amount at start of period 3,232 3,621 Additional provisions recognised (307) (389)Carrying amount at end of period 2,925 3,232

33 Equity

The Western Australian Government holds the equity interest in the department on behalf of the community. Equity represents the residual interest in the net assets of the department. The asset revaluation reserve represents that portion of equity resulting from the revaluation of non-current assets.

2017 2016Contributed equity $’000 $’000Balance at start of period 79,145 74,986Contributions by owners

Capital appropriation(a) 301 4,877

Other contributions by owners Royalties for Regions Fund—Regional Infrastructure and Headworks Account 3,192 1,129 Transfers from other agencies 182 914

Distributions to owners(b)

Transfer of assets to other agencies: Land held for distribution transferred to the Department of Lands (510) (2,761)Balance at end of period 82,310 79,145

(a) Capital contributions (appropriations) and non-discretionary (non-reciprocal) transfers of net assets between state government agencies have been designated as contributions by owners in Treasurer’s Instruction 955 ‘Contributions by Owners Made to Wholly Owned Public Sector Entities’.

(b) Treasurer’s Instruction 955 requires non-reciprocal transfers of net assets to government to be accounted for as distribution to owners in accordance with AASB Interpretation 1038.




33 Equity (continued) Asset revaluation surplus The asset revaluation reserve is used to record increments and decrements on the revaluation of land and buildings, as described in accounting policy note 2(f) ‘Property, plant and equipment and infrastructure’.

2017 2016

$’000 $’000

Balance at start of period 235,604 234,622

Land (6,290) (2,039)

Buildings (892) 3,021 Non-current assets held for distribution to owners (3,230) - Net revaluation increments/(decrements): (10,412) 982

Balance at end of period 225,192 235,604

Accumulated surplus/(deficit) Balance at start of period 48,887 43,030 Result for the period 12,760 5,838 Other comprehensive income - 19 Balance at end of period 61,647 48,887 Total equity at end of period 369,149 363,636

34 Notes to the statement of cash flows 2017 2016Reconciliation of cash $’000 $’000Cash at the end of the financial year as shown in the Statement of cash flows is reconciled to the related items in the Statement of financial position as follows:

Cash and cash equivalents (note 19) 2,542 10,310 Restricted cash and cash equivalents: current (note 20) 68,182 64,953 Restricted cash and cash equivalents: non-current (note 20) 245 - 70,969 75,263




34 Notes to the statement of cash flows (continued) 2017 2016

Reconciliation of net cost of services to net cash flows provided by/(used in) operating activities $’000 $’000

Net cost of services (150,879) (153,675)Non-cash items Net (gain)/loss on sale of assets (note 17 ‘Net gain/(loss) on disposal of non-current assets’) 1,240 (16)Depreciation and amortisation expense (note 9 ‘Depreciation and amortisation expense’) 7,925 11,403 Doubtful debts expense (note 10 ‘Other expenses’) 4 (467)Impairment expenses 964 - Resources received free of charge (note 18 ‘Income from state government’) 626 965 Other non-cash items (25,802) (572)Share of net (profit)/loss in joint ventures using equity method 2,776 6,221 (Increase)/decrease in assets Biological assets 80 188 Agricultural produce (26) 65 Inventories (60) 78 Receivables(a) 1,275 368 Available for sale financial assets - - Other assets 15,844 (644) Increase/(decrease) in liabilities

Payables(a) 2,509 (7,922)Provisions (2,620) (3,255)Net cash used in operating activities (146,144) (147,263)

(a) Note that the Australian Taxation Office (ATO) receivable/payable in respect of GST and the receivable/payable in respect of the sale/purchase of non-current assets are not included in these items as they do not form part of the reconciling items.



36 Commitments 2017 2016The commitments below are inclusive of GST where relevant. $’000 $’000Capital expenditure commitments Capital expenditure commitments, being contracted capital expenditure additional to the amounts reported in the financial statements, are payable as follows:

Within 1 year 528 370 Later than 1 year 201 - 729 370 Non-cancellable operating lease commitments Commitments for minimum lease payments are payable as follows: Within 1 year 1,905 1,991 Later than 1 year and not later than 5 years 2,887 2,677 Later than 5 years 253 24

5,045 4,692

The property leases are non-cancellable leases with five-year terms, with rents payable monthly in advance. Contingent rental provisions within the lease agreements require that the minimum lease payments shall be increased by the lower of CPI or 4% per annum. An option exists to renew the leases at the end of their five-year terms for an additional term of five years.A contractual arrangement exists between State Fleet and the department for the lease of vehicles based on both a vehicle kilometre specification and vehicle lease terms. Lease payments are made on a monthly basis. The department is responsible for registration, insurance and servicing of leased vehicles in line with the manufacturer’s recommendations, as well as the cost of refurbishment on return. State Fleet carries the residual risk on the sale of the vehicle.


35 Services provided free of charge $’000 $’000During the period the following services were provided to other agencies free of charge for functions outside the normal operations of the department.

Agricultural Produce Commission 68 51 Department of Environment Regulation 1 1 Department of Fire and Emergency Services 1 2 Department of Fisheries 4 4 Department of Parks and Wildlife 41 41 Department of Planning - 2 Department of Regional Development 1 - Department of Water 3 5 Forest Products Commission - 8 Landgate 16 2 University of Western Australia 6 12

141 128



37 Contingent liabilities and contingent assets The following contingent liabilities are additional to the liabilities included in the financial statements.

Litigation in progress

The department has six pending litigation claims that may affect the financial position to the value of $3,900,000 pertaining to cases relating to alleged quarantine orders, incorrect advice given to eradicate plant pests and injury claims. These are currently with the State Solicitor’s Office. It is uncertain when the cases will be finalised. RiskCover is providing full indemnity in the event that the department is found to be liable.

Contaminated sites

Under the Contaminated Sites Act 2003 (the Act), the department is required to report suspected contaminated sites to the Department of Environment Regulation (DER). In accordance with the Act, after specific site investigations, reports are submitted to DER to classify these sites. DER classifies these sites on the basis of the risk to human health and the environment. The department currently has fourteen sites registered with DER as possibly contaminated and one site registered as contaminated. Where a risk is identified, the department may have a responsibility for further investigation and possible site remediation, if the identified risk cannot be managed. The department adopts a risk management approach which sees properties retained and managed, rather than proceeding with site remediation. Currently the department is not planning or been directed by DER to remediate any specific sites. However, it is envisaged in the future some surplus ‘high value’ sites will require remediation to DER standards to allow the properties to proceed to sale through the Department of Lands. This future liability when known will be covered through the Department of Lands’ sale process.

38 Events occurring after the balance sheet date On the 1 July 2017 the departments of Agriculture and Food, Regional Development and Fisheries and the nine Regional Development Commissions were amalgamated to form the new Department of Primary Industries and Regional Development. The new department will combine the primary industries activities of the state and consolidate regional development functions.

There were no other events that occurred after the end of the reporting period that would materially affect the financial statements or disclosures.

39 Explanatory statement

Significant variations between estimates and actual results for income and expense as presented in the financial statement titled ‘Summary of consolidated account appropriations and income estimates’ are shown below. Significant variations are generally considered to be those greater than 5% and $4 million for the Statement of comprehensive income and Statement of cash flow and greater than 5% and $8.1 million for the Statement of financial position.





39 Explanatory statement (continued)Variance

note

2017 2017 2016 Variance Variance

Statement of comprehensive income Original budget

Actual ActualEstimate and

actualActual for

2016 and 2017

Cost of service $’000 $’000 $’000 $’000 $’000Expenses Employee benefits expense 1 114,671 110,315 108,710 (4,356) 1,605 Supplies and services 2 A 83,048 43,953 61,165 (39,095) (17,212)Depreciation and amortisation expense 9,826 7,925 11,403 (1,901) (3,478)Share of loss in joint venture entities using the equity method - 2,776 6,221 2,776 (3,445)Other expenses 3 B - 6,891 1,571 6,891 5,320 Grants and subsidies paid 4 C 11,488 27,305 19,114 15,817 8,191 Loss on disposal of non-current assets - 1,240 - 1,240 1,240 Total cost of service 219,033 200,405 208,184 (18,628) (7,779)Revenue User charges and fees 13,930 13,067 11,361 (863) 1,706 Commonwealth grants and contributions 1,766 3,389 3,530 1,623 (141)Grants and subsidies received 5 D 28,561 20,782 26,283 (7,779) (5,501)Interest revenue 858 960 661 102 299 Gain on disposal of non-current assets - - 16 - (16)Other revenue 6 7,015 11,328 12,658 4,313 (1,330)Total revenue 52,130 49,526 54,509 (2,604) (4,983)Total income other than income from state government 52,130 49,526 54,509 (2,604) (4,983)Net cost of service 166,903 150,879 153,675 (16,024) (2,796)Income from state government Service appropriations E 116,297 116,535 121,924 238 (5,389)Resources received free of charge 737 626 965 (111) (339)Royalties for Regions Fund F 44,414 46,478 36,624 2,064 9,854 Total Income from state government 161,448 163,639 159,513 2,191 4,126 Surplus/(deficit) for the period (5,455) 12,760 5,838 18,215 6,922 Other comprehensive income Items not subsequently reclassified to net cost of service Changes in asset revaluation surplus - (10,412) 982 (10,412) (11,394)Gains/(losses) recognised directly in equity - - 19 - (19)Total other comprehensive income - (10,412) 1,001 (10,412) (11,413)Total comprehensive income for the period (5,455) 2,348 6,839 7,803 (4,491)




note


Statement of comprehensive income Original budget


actualActual for

2016 and 2017

Cost of service $’000 $’000 $’000 $’000 $’000Expenses Employee benefits expense 1 114,671 110,315 108,710 (4,356) 1,605 Supplies and services 2 A 83,048 43,953 61,165 (39,095) (17,212)Depreciation and amortisation expense 9,826 7,925 11,403 (1,901) (3,478)Share of loss in joint venture entities using the equity method - 2,776 6,221 2,776 (3,445)Other expenses 3 B - 6,891 1,571 6,891 5,320 Grants and subsidies paid 4 C 11,488 27,305 19,114 15,817 8,191 Loss on disposal of non-current assets - 1,240 - 1,240 1,240 Total cost of service 219,033 200,405 208,184 (18,628) (7,779)Revenue User charges and fees 13,930 13,067 11,361 (863) 1,706 Commonwealth grants and contributions 1,766 3,389 3,530 1,623 (141)Grants and subsidies received 5 D 28,561 20,782 26,283 (7,779) (5,501)Interest revenue 858 960 661 102 299 Gain on disposal of non-current assets - - 16 - (16)Other revenue 6 7,015 11,328 12,658 4,313 (1,330)Total revenue 52,130 49,526 54,509 (2,604) (4,983)Total income other than income from state government 52,130 49,526 54,509 (2,604) (4,983)Net cost of service 166,903 150,879 153,675 (16,024) (2,796)Income from state government Service appropriations E 116,297 116,535 121,924 238 (5,389)Resources received free of charge 737 626 965 (111) (339)Royalties for Regions Fund F 44,414 46,478 36,624 2,064 9,854 Total Income from state government 161,448 163,639 159,513 2,191 4,126 Surplus/(deficit) for the period (5,455) 12,760 5,838 18,215 6,922 Other comprehensive income Items not subsequently reclassified to net cost of service Changes in asset revaluation surplus - (10,412) 982 (10,412) (11,394)Gains/(losses) recognised directly in equity - - 19 - (19)Total other comprehensive income - (10,412) 1,001 (10,412) (11,413)Total comprehensive income for the period (5,455) 2,348 6,839 7,803 (4,491)



note


Statement of financial position Original budget


actualActual for

2016 and 2017Current assets $’000 $’000 $’000 $’000 $’000Cash and cash equivalents 1 12,595 2,542 10,310 (10,053) (7,768)Restricted cash and cash equivalents 2 35,868 68,182 64,953 32,314 3,229 Biological assets 1,419 1,151 1,231 (268) (80)Agricultural produce - 171 145 171 26 Inventories 861 633 573 (228) 60 Receivables 4,409 4,004 5,279 (405) (1,275)Amounts receivable for services 2,589 2,589 3,975 - (1,386)Assets classified as held for distribution to owners 3 A - 59,711 - 59,711 59,711 Other current assets 4,870 1,160 1,779 (3,710) (619)Total current assets 62,611 140,143 88,245 77,532 51,898 Non-current assets Restricted cash and cash equivalents 319 245 - (74) 245 Amounts receivable for services 72,897 72,897 65,660 - 7,237 Other non-current assets 4 B 31,843 7,423 22,648 (24,420) (15,225)Assets classified as held for distribution to owners 5 C - 15,470 2,749 15,470 12,721 Investment accounted for using equity method 14,611 11,669 9,451 (2,942) 2,218 Property plant and equipment 6 D 197,756 153,080 208,233 (44,676) (55,153)Intangible assets 6,995 4,297 2,836 ( 2,698) 1,461 Total non-current assets 324,421 265,081 311,577 (59,340) (46,496)Total assets 387,032 405,224 399,822 18,192 5,402 Current liabilities Payables 13,898 8,609 6,100 (5,289) 2,509 Provisions 28,411 23,033 25,741 (5,378) (2,708)Total current liabilities 42,309 31,642 31,841 (10,667) (199)Non-current liabilities Provisions 4,232 4,433 4,345 201 88 Total non-current liabilities 4,232 4,433 4,345 201 88 Total liabilities 46,541 36,075 36,186 (10,466) (111)Net assets 340,491 369,149 363,636 28,658 5,513 Equity Contributed equity 87,674 82,310 79,145 (5,364) 3,165 Reserves 7 E 234,586 225,192 235,604 (9,394) (10,412)Accumulated surplus 8 18,231 61,647 48,887 43,416 12,760 Total equity 340,491 369,149 363,636 28,658 5,513





note


Statement of cash flows Original budget


actualActual for

2017 and 2016Cash flow from state government $’000 $’000 $’000 $’000 $’000Service appropriation A 106,471 106,709 113,468 238 (6,759)Capital contributions 301 3,675 6,006 3,374 (2,331)Holding account drawdown 3,975 3,975 3,675 - 300 Royalties for Regions Fund B 49,742 46,478 36,624 (3,264) 9,854 Net cash provided by state government 160,489 160,837 159,773 348 1,064 Utilised as follows: Cash flows from operating activities Payments Employee benefits C (110,293) ( 111,070) ( 117,651) ( 777) 6,581 Supplies and services 1 D (85,626) ( 53,597) ( 64,797) 32,029 11,200 GST payments on purchases (5,132) ( 8,043) ( 8,871) ( 2,911) 828 GST payments to taxation authority 2 (5,941) ( 253) ( 177) 5,688 ( 76)Other payments 3 E (357) ( 5,298) ( 345) ( 4,941) ( 4,953)Grants and subsidies 4 F (10,488) ( 27,173) ( 19,114) ( 16,685) ( 8,059)Receipts User charges and fees 16,008 12,958 13,410 ( 3,050) ( 452)Commonwealth grants and contributions 1,766 3,257 3,530 1,491 ( 273)Interest received 858 977 1,042 119 ( 65)GST receipts on sales 5,132 3,009 3,366 ( 2,123) ( 357)GST receipts from taxation authority 5,941 6,585 3,939 644 2,646 Other receipts G 32,632 32,504 38,405 ( 128) ( 5,901)Net cash used in operating activities (155,500) (146,144) (147,263) 9,356 1,119 Cash flows from investing activities Payments Investment in joint ventures 5 - ( 4,994) ( 5,491) ( 4,994) 497 Purchase of non-current assets H (13,026) ( 13,995) ( 8,222) ( 969) ( 5,773)Receipts Proceeds from sale of non-current physical assets - 2 665 2 ( 663)Net cash used in investing activities (13,026) (18,987) (13,048) (5,961) (5,939) Net increase/(decrease) in cash held (8,037) ( 4,294) ( 538) 3,743 ( 3,756)Cash and cash equivalents at the beginning of the reporting period 56,819 75,263 75,801 18,444 ( 538)Cash and cash equivalents at the end of the reporting period 48,782 70,969 75,263 22,187 (4,294)



Major variance narratives

Statement of comprehensive income

Variances between estimate and actual ($’000s) (continued)

1) Employee benefits expense—$4,356 variance. The reduction in employee-related costs reflects the lower average number of employees compared to estimate.

2) Supplies and services—$39,095 variance. This relates to underspend on externally funded projects which are carried over to the new financial year, and some expenditure being incurred as grants and subsidies rather than supplies and services as well as a $15,171 reduction in 2016/17 costs following the reversal of expenses as a result of capitalising water infrastructure associated with the Gascoyne Food Bowl Initiative (note 8).

3) Other expenses—$6,891 variance. This is predominantly due to the return of funds to Treasury which were provided to the department in prior periods.

4) Grant and subsidies paid—$15,817 variance. The increase in grants and subsidies as compared to estimate relates to other expenditure being incurred as grants and subsidies rather than supplies and services.

5) Grants and subsidies received—$7,779 variance. The reduction compared to estimate is due to reduced funding from the Grains Research and Development Corporation as well as other miscellaneous Commonwealth funding that was included in the estimate but not received.

6) Other revenue—$4,313 variance. The increase compared to estimate is due to higher contributions following the record season experienced by the BAMA Industry Funding Schemes.

Variances between 2017 and 2016 ($’000s)

A) Supplies and services—$17,212 variance. During 2017 $15,171 of costs associated with the Gascoyne Food Bowl Initiative (note 8) were capitalised with the balance related to a higher level of project underspend.

B) Other expenses—$5,320 variance. The increase in other expenses is predominantly due to the return of funds to Treasury which were provided to the department in prior periods.

C) Grants and subsidies paid—$8,191 variance. The increase in grants paid is predominantly due to the support provided to the potato industry as part of its deregulation.

D) Grants and subsidies received—$5,501 variance. This reduction is predominantly due to the stage and timing of projects funded through the Grains Research and Development Corporation as well as a lower level of general commercial grants especially in the horticulture sector.

39 Explanatory statement (continued)






E) Service appropriations—$5,389 variance. The variance between 2017 and 2016 is due to the reduction in state government appropriation year on year.

F) Royalties for Regions Fund—$9,854 variance. This increase reflects the higher level of planned spend on RfR-funded projects during the year including the $12.8m funding to support the potato industry through its deregulation.

Statement of financial position

Variances between estimate and actual ($’000s)

1) Cash and cash equivalents—variance of $10,053. The reduction compared to estimate is due to higher than expected payments for goods and services in the last quarter of the financial year.

2) Restricted cash and cash equivalents—variance of $32,314. The estimate did not include restricted cash on hand of $9,521 relating to the Royalties for Regions projects. The estimates also included an assumption that the special purpose accounts would be drawn down throughout the financial year—as this did not occur, fund balances have remained stable.

3) Current assets classified as held for distribution to owners—$59,711 variance. The variance between actual and estimate has occurred as a result of the South Perth location, which we have received instruction will be transferred to Landcorp imminently as part of the state government’s Land Asset Sales Program.

4) Other non-current assets—variance of $24,420. Doppler radar ($14,600) was classified as a prepayment in 2016 and assumed to stay there in the 2017 estimate. Instead, Doppler radar has been commissioned and the underlying assets transferred to property, plant and equipment in 2017 actuals. The balance of the variance relates to other RfR-funded capital items which have been delayed until the 2018/19 year.

5) Non-current assets classified as held for distribution to owners—$15,470 variance. The variance is a result of new regional locations identified as surplus to requirements and available for sale. The sales process is not expected to materialise during the 2017/18 period.

6) Property, plant and equipment—variance of $44,676. The 2016/17 actuals has $75,200 transferred out to assets held for distribution as above, $14,600 transferred in for Doppler radar and $15,171 transferred in for Gascoyne Infrastructure.

7) Reserves—variance of $9,394. This reduction reflects the latest land and building valuations provided by Landgate to the department.8) Accumulated surplus—variance of $43,416. Please refer to the variances explained in the Statement of comprehensive income previously

to obtain an understanding of the variance in the accumulated surplus. There was also a variance due to the understatement of the 2016 forecast closing accumulated surplus position which carried forward into the 2017 estimate.

Statement of comprehensive income (continued)





A) Current assets classified as held for distribution to owners—$59,711 variance. The variance between 2017 and 2016 is due to the planned sale of the South Perth location (refer above).

B) Other non-current assets—variance of $15,225. Doppler radar has transferred to property, plant and equipment in 2017 (see item 4 above). C) Assets classified as held for distribution to owners—variance of $12,721. The variance is a result of new regional locations identified as surplus

to requirements and available for sale.D) Property, plant and equipment—variance of $55,153. The 2016/17 actuals has $75,200 transferred out to assets held for distribution as above

less $15,171 transferred in for Gascoyne Infrastructure, $14,600 for Doppler radar and approximately $10,000 for other additions during the year.

E) Reserves—variance of $10,412. This reduction reflects the latest land and building valuations provided by Landgate to the department.

Statement of cash flows


1) Supplies and services—$32,029 variance. This relates to underspend on externally funded projects which are carried over to the new financial year, some expenditure being incurred as grants and subsidies rather than supplies and services as well as the capitalisation of costs associated with the Gascoyne Food Bowl Infrastructure.

2) GST payments to taxation authority—$5,688 variance. This is due to an overstatement in the estimate.

3) Other payments—$4,941 variance. This is due to to the return of funds to Treasury which were provided to the department in prior periods.

4) Grant and subsidies—variance of $16,685. The increase in grants and subsidies as compared to the estimate relates to other expenditure being incurred as grants and subsidies rather than supplies and services including support provided to the potato industry post deregulation.

5) Investment in joint ventures—$4,994 variance. This reflects the additional investment in Intergrain Pty Ltd during the year which is discussed in Notes 12 and 27.


A) Service appropriation—$6,759 variance. The variance between 2017 and 2016 is due to a reduction in state government appropriation year on year.

B) Royalties for Regions Fund—$9,854 variance. The increase in 2017 is due to the increased RfR project activity including the potato industry adjustment initiative.


Statement of financial position (continued)




C) Employee benefits—$6,581 variance. The reduction in employee costs reflects the reduced staffing level of the department. D) Supplies and services—$11,200 variance. The reduction relates to underspend on externally funded projects which are carried over to the new

financial year and the capitalisation of costs associated with the Gascoyne Food Bowl Infrastructure. E) Other payments—$4,953 variance. The increased cash outflow reflects the return of funds to Treasury which were provided to the department in

prior periods. F) Grants and subsidies—$8,059 variance. The variance between 2017 and 2016 is due to the timing and quantum of grant payments including the

potato industry adjustment initiative of $12m. G) Other receipts—$5,901 variance. The variance between 2017 and 2016 is due to the reduced level of grants and subsidies received in 2017. H) Purchase of non-current assets—$5,773 variance. The increased spend in the current year is due to the capital spend by the department in

areas such as the Northam offices, the Gascoyne Food Bowl Initiative, the upgrades to the finance and HR systems as well as several other smaller projects.

2017 2016

40 Remuneration of auditors $’000 $’000

Remuneration paid or payable to the Auditor General in respect of the audit for the current financial year is as follows:

Auditing the accounts, financial statements and performance indicators 395 397

The amount above includes the fee for the audit of the Royalties for Regions annual certificates, amounting to $80,000 (2016: $86,000). The expense is included in note 8 ‘Supplies and services’.

41 Related bodies

The following industry funding schemes are deemed to be related bodies by the Treasurer:– The Cattle Industry funding scheme– The Grains, Seeds and Hay Industry funding scheme– The Sheep and Goat Industry funding schemeThe funds of the three schemes are reported as Restricted cash and cash equivalents (note 20) and movements in Special purpose accounts (note 47). The transactions and results of these related bodies have been included in the financial statements.

42 Affiliated bodies

The department had no affiliated bodies during the financial year.


Statement of cash flows

Variances between 2017 and 2016 ($’000s) (continued)




43 Jointly controlled assets The department has shared ownership of Crown land and buildings with the Department of Environment

Regulation. The following amounts represent the fair value of the assets employed in the joint ownership: 2017 2016

Non-current assets $’000 $’000Land 9,500 7,580 Building 30 1,195

9,530 8,775 The department’s share of these assets has been included in property, plant and equipment.

The shared ownership of Crown land and buildings with the Department of Environment Regulation relates to the following sites:

(a) Ravensthorpe was established as a purpose built co-located facility. Both parties meet all costs equally with regards to proposed future developments. The department is responsible for all costs associated with the disposal of the site should it be deemed surplus to requirements.

(b) Forrestfield was established in 1993 to protect fauna and flora located on the site and the department has been responsible for all costs in regards to maintaining the site and any proposed future developments.

44 Financial instruments (a) Financial risk management objectives and policies Financial instruments held by the department are cash and cash equivalents, restricted cash and cash equivalents, Treasurer’s Advances,

receivables, payables and listed and unlisted investments. The department has limited exposure to financial risks. The department’s overall risk management program focuses on managing the risks identified below.

Credit risk Credit risk arises when there is the possibility of the department’s receivables defaulting on their contractual obligations resulting in financial loss

to the department.

The maximum exposure to credit risk at the end of the reporting period in relation to each class of recognised financial assets is the gross carrying amount of those assets inclusive of any allowance for impairment as shown in note 23 ‘Receivables’.

Credit risk associated with the department’s financial assets is minimal because the main receivable is the amount receivable for services (holding accounts). For receivables other than government, the department trades only with recognised, creditworthy third parties. The department has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In addition, receivable balances are monitored on an ongoing basis with the result that the department’s exposure to bad debts is minimal. At the end of the reporting period there was no significant concentration of credit risk.

Allowance for impairment of financial assets is calculated based on objective evidence, such as observable data in client credit ratings. For financial assets that are either past due or impaired, refer to note 44(c) ‘Financial instrument disclosures’.




44 Financial instruments (continued)

Liquidity risk

Liquidity risk arises when the department is unable to meet its financial obligations as they fall due. The department is exposed to liquidity risk through its trading in the normal course of business. The department has appropriate procedures to manage cash flows including drawdown of appropriations by monitoring forecast cash flows to ensure that sufficient funds are available to meet its commitments.

Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates and interest rates will affect the department’s income or the value of its holdings of financial instruments. The department does trade in foreign currency but values are not considered material. The department is not materially exposed to other price risks (for example, equity securities or commodity prices changes). Other than as detailed in the interest rate sensitivity analysis at note 44(c), the department is not exposed to interest rate risk because apart from certain balances of restricted cash, all other cash and cash equivalents and restricted cash are non-interest bearing and there are no borrowings.

(b) Categories of financial instruments The carrying amounts of each of the following categories of financial assets and financial liabilities at the end of the reporting period are as follows:

2017 2016Financial assets $’000 $’000Cash and cash equivalents 2,542 10,310 Restricted cash and cash equivalents 68,427 64,953 Loans and receivables(a) 82,303 72,538 Available for sale financial assets 55 55

Financial liabilities Financial liabilities measured at amortised cost 8,609 6,100

(a) Service appropriations fund the net cost of services delivered. Appropriation revenue comprises a cash component and a receivable (asset). The receivable (holding account) comprises the budgeted depreciation expense for the year and any agreed increase in leave liabilities during the year.

(c) Financial instrument disclosures

Credit risk

The following details the department’s maximum exposure to credit risk and the ageing analysis of financial assets. The department’s maximum exposure to credit risk at the end of the reporting period is the carrying amount of financial assets as shown below. Disclosed below is the ageing of financial assets that are past due but not impaired and impaired financial assets. It is based on information provided to senior management of the department.




44 Financial instruments (continued)

The department does not hold any collateral as security or other credit enhancements relating to the financial assets it holds.

2017 2016The ageing of trade and other receivables was as follows: $’000 $’000Neither past due nor impaired 2,173 1,482 Up to 1 month past due 144 744 1–3 months past due 259 165 3–12 months past due 78 237 1–5 years past due 73 51 Impaired trade and other receivables 178 288

2,905 2,967

Liquidity risk and interest rate exposure

All the department’s financial instruments are non-interest bearing with the exception of restricted cash and cash equivalents of $34,819,637 2016: $31,578,000) which earns interest at a variable rate. The maturity date of all financial instruments is 30 days.

Interest rate sensitivity analysis

The department is exposed to interest rate risk on its restricted cash and cash equivalents of $34,819,637 (2016: $31,578,000). The weighted average interest rate for restricted cash and cash equivalents is 1.975% (2016: 2.257%). A 1% change in interest rates at reporting period end would result in an increase/decrease in profit or loss and equity of $348,196 (2016: $315,780) depending upon whether interest rates increased/decreased. It is assumed that the change in interest rates is held constant throughout the reporting period.

Fair values

All financial assets and liabilities recognised in the Statement of financial position, whether they are carried at cost or fair value, are recognised at amounts that represent a reasonable approximation of fair value unless otherwise stated in the applicable notes.



2017 2016

45 Supplementary financial information $’000 $’000(a) Write-offs

Non-current assets

During the financial year $78,298 (2016: $0) was written off the department’s asset register under the authority of:

The accountable authority 78 - The Minister - - 78 - Irrecoverable amounts and inventory

During the financial year $136,423 (2016: $107,812) was written off in bad debts and inventory under the authority of:

The accountable authority 136 108 The Minister - - 136 108 Biological assets

During the financial year $60,000 (2016: $30,000) was written off the department’s ledger under the authority of:

The accountable authority 60 30 The Minister - - 60 30

(b) Losses through theft, defaults and other causes Losses of public moneys and public and other property through theft or default - -

Amounts recovered—insurance - - - -

2017 2016

46 Indian Ocean Territories Service Level Agreement $’000 $’000The provision of services to the Indian Ocean territories are recouped from the Commonwealth Government.

Opening balance 35 (63)Receipts 132 228 Payments (105) (130)Closing balance 62 35




47 Special purpose accounts 2017 2016 Agriculture Research Grants Account No. 1 (non-interest bearing) $’000 $’000

The purpose of the fund is to receive and disperse funds from industry and other organisations in support of agricultural research projects.

Balance at start of period 18,560 16,270 Receipts 31,629 33,297 Payments (33,302) (31,007) Balance at end of period 16,887 18,560 Agriculture Research Grants Account No. 2

The purpose of the fund is to receive and disperse funds from industry and other organisations in support of agricultural research projects.

Balance at start of period 4,103 3,244 Receipts 733 3,714 Payments (1,685) (2,855) Balance at end of period 3,151 4,103 Commonwealth Agriculture Activity Grants (non-interest bearing) The purpose of the fund is to receive and disperse funds to conduct Commonwealth-funded activities. Balance at start of period 3,042 1,308 Receipts 3,604 3,357 Payments (2,094) (1,623) Balance at end of period 4,552 3,042 Plant Research and Development

The purpose of the fund is to receive and disperse funds to conduct plant research and development in Western Australia.

Balance at start of period 10,342 8,655 Receipts 1,228 1,822 Payments (179) (135) Balance at end of period 11,391 10,342





47 Special purpose accounts (continued) 2017 2016 Cattle Industry Funded Scheme $’000 $’000

The purpose of the fund is to receive and disperse funds from the cattle industry to enable industry to self-determine and self-fund appropriate responses to serious pest and disease incursions which predominantly impact on the industry sector and which are not otherwise covered under existing arrangements at the national level.

Balance at start of period 5,475 5,447 Receipts 395 334 Payments (292) (306) Balance at end of period 5,578 5,475 Declared Pest Account

The purpose of the fund is to receive and disperse funds collected to carry out measures to control declared pests on and in relation to areas for which the rates were collected.

Balance at start of period 1,917 1,838 Receipts 3,557 2,192 Payments (2,680) (2,113) Balance at end of period 2,794 1,917 Land Conservation Districts Fund

The purpose of the fund is to promote soil conservation through research and implementation of soil and conservation measures and practices.

Balance at start of period 42 41 Receipts 164 63 Payments (62) (62) Balance at end of period 144 42 Grain, Seeds and Hay Industry Funded Scheme

The purpose of the fund is to receive and disperse funds from the grain, seeds and hay industry to enable the industry to self-determine and self-fund appropriate responses to serious pest and disease incursions which predominantly impact on the industry sector and which are not otherwise covered under existing arrangements at the national level.

Balance at start of period 7,740 7,631 Receipts 5,394 4,016 Payments (3,378) (3,907) Balance at end of period 9,756 7,740




47 Special purpose accounts (continued)

Sheep and Goats Industry Funded Scheme 2017 2016 $’000 $’000

The purpose of the fund is to receive and disperse funds from the sheep and goats industry to enable the industry to self-determine and self-fund appropriate responses to serious pest and disease incursions which predominantly impact on the industry sector and which are not otherwise covered under existing arrangements at the national level.

Balance at start of period 1,959 1,623 Receipts 872 895 Payments (817) (559) Balance at end of period 2,014 1,959

48 Disclosure of administered income and expenses by service

Co-operative loans Commonwealth grants State NRM program Total 2017 2016 2017 2016 2017 2016 2017 2016Cost of service $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Expenses

Grants, subsidies & transfer payment

- - 2,863 4,475 8,096 4,372 10,959 8,847

Interest payments 997 647 - - - - 997 647Other expenses 370 1,034 - - 647 648 1,017 1,682

Total administered expenses 1,367 1,681 2,863 4,475 8,743 5,020 12,973 11,176

Income Service appropriation - - - - 1,600 1,600 1,600 1,600Royalties for Regions - - - - 6,195 6,330 6,195 6,330Interest revenue 1,367 882 98 189 - - 1,465 1,071Other revenue - 20 384 (314) 26 78 410 (216)Total administered income 1,367 902 482 (125) 7,821 8,008 9,670 8,785




49 Explanatory statement for administered items

Variance note

2017 Original budget

2017 Actual 2016 ActualVariance estimate

and actual

Variance actual

2017 and 2016

Cost of service $’000 $’000 $’000 $’000 $’000Expenses Grants, subsidies & transfer payment 1, A 8,297 10,959 8,847 2,662 2,112 Interest payments 2, B 871 997 647 126 350 Other expenses C 1,044 1,017 1,682 (27) (665)Total administered expenses 10,212 12,973 11,176 2,761 1,797 Income Service appropriation 1,600 1,600 1,600 - -Interest revenue 3,D 1,122 1,465 1,071 343 394 Other revenue 4,E - 410 (216) 410 626 Royalties for Regions Fund—Regional Infrastructure and Headworks Fund

6,195 6,195 6,330 - (135)

Total administered income 8,917 9,670 8,785 753 885




49 Explanatory statement for administered items (continued)


1) Grants, subsidies & transfer payment—variance of $2,662. This relates to grant payments from the Commonwealth Single Holdings Account (CSHA) not included in the current year budget. Funding decisions regarding the CSHA are made during the financial year.

2) Interest payments—variance of $126. New Co-operative loans issued during 2016/17 have resulted in higher interest payments being made based upon a higher loan principal amount outstanding. This is offset by higher interest receipts from loan recipients.

3) Interest revenue—variance of $343. Refer note 2 above.

4) Other revenue—variance of $410. This relates to the correction of an incorrect GST adjustment recorded against the CSHA other revenue in 2016.


A) Grants, subsidies & transfer payment—variance of $2,112. This relates to additional grants paid from the CSHA in the current year.

B) Interest payments—variance of $350. The average outstanding loan balance of the Co-operative loan scheme is higher than 2016, resulting in increased interest charges. This is offset by the higher interest earned on the increased principal amounts owing (see note D below).

C) Other expenses—variance ($665). 2016 included operating expenses for previous years in relation to the Co-operative loan portfolio. The charge for 2017 is the normal annual charge.

D) Interest revenue—variance of $394. Refer to note B above. This relates to the increased loans made available to loan recipients under the Co-operative loan scheme.

E) Other revenue—variance of $626. This relates to the correction of an incorrect GST expense recorded against the CSHA in 2016.




50 Disclosure of administered assets and liabilities by service

Co-operative loans Commonwealth grants State NRM program Total 2017 2016 2017 2016 2017 2016 2017 2016Statement of assets and liabilities $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Current assets Cash and cash equivalents - - 2,643 5,016 5,981 6,709 8,624 11,725 Receivables 5,335 8,789 20 29 38 233 5,393 9,051 Total administered current assets 5,335 8,789 2,663 5,045 6,019 6,942 14,017 20,776 Non-current assets Loan 27,255 22,679 - - - - 27,255 22,679 Total administered non-current assets 27,255 22,679 - - - - 27,255 22,679 Total administered assets 32,590 31,468 2,663 5,045 6,019 6,942 41,272 43,455 Current liabilities Payables - - - - - - -Borrowings 5,335 8,789 - - - - 5,335 8,789 Total administered current liabilities 5,335 8,789 - - - - 5,335 8,789 Non-current liabilities Borrowings 27,255 22,679 - - - - 27,255 22,679 Total administered non-current liabilities 27,255 22,679 - - - - 27,255 22,679 Total administered liabilities 32,590 31,468 - - - - 32,590 31,468



Additional key performance indicator information

Certification of key performance indicatorsFor the year ended 30 June 2017

I hereby certify that the key performance indicators are based on proper records, are relevant and appropriate for assisting users to assess the Department of Agriculture and Food, Western Australia’s performance, and fairly represent the performance of the department for the financial year ended 30 June 2017.

At the date of signing, we are not aware of any circumstances which would render any particulars included in this section misleading or inaccurate.


15 August 2017



Detailed information in support of key performance indicators

Assessing our effectiveness

Effectiveness indicator 1: Proportion of co-investment in DAFWA-led initiatives

This KPI allows us to understand our effectiveness in encouraging industry and others to invest alongside the Western Australian Government in developing and promoting WA’s agrifood sector.

Investment included under this KPI relates to both cash and in-kind resources for all work undertaken, or commissioned by us, and funded in part by the Western Australian Government, excluding those in which we play a purely administrative role.

This KPI includes co-investment through entities created as a means of building collaboration, such as AEGIC Ltd, but excludes profit-oriented entities established to ensure the successful commercialisation of activities no longer receiving direct government support, such as InterGrain Pty Ltd.

Table 6 shows that our expenditure of co-invested funds was 22.7%, a reduction in comparison to our 2015/16 result (of 24.6%), and below our 2016/17 target of 25%. While we had success in encouraging significant investment in the Productive Natural Resources and Productivity Improvement and Innovation services, we were below target in relation to the remaining four services.

We attribute this to the completion of several major contracts; our primary focus on the Royalties for Regions (RfR) funded Seizing the Opportunity initiative (which is not considered a co-investment as the funds stem from the state government); and the continuing decline in the department’s overall funding. We expect co-investment to increase in 2017/18 as new co-investments — currently in the pipeline — come to fruition. Projects include enhanced agronomic strategies for improved crop performance on water repellent soils in WA in partnership with the Grains Research and Development Corporation (valued at over $1 million), and value chain capability development in partnership with various research development corporations.

Table 6 Proportion of co-investment in DAFWA-led initiatives

2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Target

(%)

2016/17 Actual

(%)

Variation(%)

Co-investment in DAFWA-led initiatives (percentage NCoS*)

33.8 25.0 24.6 25.0 22.7 –2.3

Source: DAFWA; *NCoS = net cost of service

http://www.aegic.org.au/

http://www.intergrain.com/



Effectiveness indicators 2–4: Industry views on our effectiveness

A further three effectiveness indicators are used to evaluate the department’s impact on the profitability, innovativeness and environmental sustainability of the agrifood sector. These indicators are determined by a survey of agrifood producers, intermediaries and consultants undertaken each year in May, and captures the view of at least 400 respondents.

The survey

This year’s survey involved 401 respondents comprising 301 primary producers, 67 intermediaries (primarily processors, marketers and exporters) and 33 agribusiness consultants. It was designed, executed and analysed by Painted Dog Research. Producer respondents were drawn primarily from the state’s major agricultural industries — grains, sheep, beef, dairy and horticulture. To the extent possible, the survey focused on larger producers, as per the threshold criteria set out in Table 7. Scale criteria were not applied to horticultural producers, due to the diversity of their production systems, or to intermediaries or consultants.

Table 7 Threshold stocking and production levels for producers considered in the 2017 survey

Principal product type Threshold

Sheep >2000 head

Grain >500 tonnes harvested

Beef – agricultural >500 head

Beef – pastoral >2500 head

Intensive livestock

– Dairy >200 head

– Pig (breeders) >50 sows

– Pig (growers) >1000 head

– Poultry >10 000 head

A new approach to our business

In 2015 and 2016, the department undertook an extensive review of its current functions and future direction in response to significant changes to the structure of the department and its available resources. Out of this, the department developed a new approach to its business relationship with industry, including:

• a more effective partnership and vision with industry

• a better relationship with those seeking to maintain their business at current levels

• a focus on building the deep foundations for growth

• better leveraging of the department’s skills, resources and linkages

• stronger advocacy and representation of the sector.



The department believes that this new approach has a direct bearing on this year’s effectiveness indicator results.

Amended indicator benchmark

Respondents rated our impact on a scale from zero to 10, with zero representing ‘no impact at all’ and a score of 10 indicating the department ‘had a very strong impact’. A score of five or above is considered a ‘moderate to significant’ impact, and is now the formal benchmark for these indicators. In prior years, only scores of six or above were considered, this being deemed a ‘significant’ impact. The change was made on the basis that, in previous years, scores of five and above had shown greater variation — and hence greater interpretative value — than when they were restricted to scores of six and above.

As this is the first time this amended benchmark is reported, both are shown, in separate tables, for comparison purposes. The latter table (Table 9) does not include a 2016/17 target.

Overall, we believe that this year’s survey results reinforce that the department’s new approach and strategic direction has improved our engagement with stakeholders and our ability to respond to their evolving needs. This year’s results appear to arrest the decline seen over the past three years, with all three indicators being roughly in line with our 2015/16 results (Table 8). All three results are above the 2016/17 target, which had been set in light of the preceding results.

Table 8 Respondent ratings of DAFWA’s impact (five or above) on profitability, sustainability and fostering innovation – actuals v. target

Impact scored at 5 or above

2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Target

(%)

2016/17 Actual

(%)

Variation(%)

Profitability 54.9 46.1 42.1 40.0 41.5 1.5

Innovativeness 54.2 45.8 40.5 40.0 43.7 3.7

Sustainability 60.5 46.9 47.0 43.0 47.7 4.7

Table 9 Respondent ratings of DAFWA’s impact (six or above) on profitability, sustainability and fostering innovation – actuals v. previous year actuals


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Actual

(%)

Variation from 2015/16 actual

(%)Profitability 29.3 24.6 24.6 27.2 2.6

Innovativeness 29.1 24.7 23.2 23.5 0.3

Sustainability 37.5 28.6 27.0 31.5 4.5

The survey also highlighted growing confidence and optimism about the future among respondents. This reflects a number of reasons, including current high produce prices, strong demand for products and confidence in the future of the industry.



Key survey messages for each of the respondent groups

• Where historically primary producers rate the department more favourably across all KPIs than intermediaries and consultants, this year’s results showed a slight reduction in their rating of the department’s influence on profitability and sustainability, and only a slight increase in innovation.

• There was a significant increase in intermediaries rating the department’s influence on sustainability and innovation, although a small reduction in profitability. This improvement is likely due to the department’s suite of RfR projects which seek to improve its engagement with this group of clients.

• Across all three KPIs, there was a significant improvement in consultant’s ratings of the department’s influence. Our relationship with consultants is one in which many consultants use knowledge and products created by the department with their clients.

Effectiveness indicator 2: Proportion of businesses that consider DAFWA has positively influenced the profitability of the sector

This year’s survey indicated that, across all respondents, 41.5% rated the department as having a moderate to significant impact on the profitability of their industry over the past year. This result is marginally down on the 2015/16 result of 42.1%, but above the 2016/17 target of 40% (Table 10).

There was significant improvement in terms of the rating received from consultants, with 60% viewing the department’s influence on profitability as moderate to significant, compared to just 40% in 2015/16. Primary producers and intermediaries ratings were largely consistent with last year’s results (further detail provided under effectiveness indicator 3).

Table 10 Respondent ratings of DAFWA’s impact on profitability (five or above) – actuals v. target


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Target

(%)

2016/17 Actual

(%)

Variation(%)

Profitability 54.9 46.1 42.1 40.0 41.5 1.5

Table 11 Respondent ratings of DAFWA’s impact on profitability (six or above) – actuals v. previous year actuals


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Actual

(%)


(%)Profitability 29.3 24.6 24.6 27.2 2.6

To further understand this KPI, respondents are also asked about their aspirations for business growth, and whether they are seeking to grow, maintain or reduce their business.

The 2016/17 survey found that 53% of respondents are seeking to grow their business over the next three years, and 35% are seeking to maintain their current business size and structure. Of those looking to increase, 43% rated the department’s influence on profitability as moderate to significant, in line with last year’s result of 44%.

Similarly, of those seeking to grow their businesses, it was again the newer entrants to the sector that rated us most highly, continuing a similar trend identified in last year’s report. Of respondents with 20 years or less experience in the industry, 46% rated our impact on the profitability of the sector as moderate to significant.



Effectiveness indicator 3: Proportion of businesses that consider DAFWA has fostered innovation in the sector

The impact of the department on the ability of industry to make changes in the future is used as a proxy for the department fostering innovation in the sector. Our focus under this indicator is support to businesses to be able to make timely, locally relevant and evidence-based decisions.

This year’s survey highlights that 43.7% of respondents rate the department’s impact on their innovativeness as moderate to significant. This is an improvement on last year’s result of 40.5%, and is higher than our 2016/17 target of 40.0% (Table 12). This is a positive sign, noting that although the department has had to reduce its total staff contingent, it is still able to deliver products and services which go beyond its core regulatory functions.

Table 12 Respondent ratings of DAFWA’s impact on innovativeness (five or above) – actuals v. target


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Target

(%)

2016/17 Actual

(%)

Variation(%)

Innovativeness 54.2 45.8 40.5 40.0 43.7 3.7

Table 13 Respondent ratings of DAFWA’s impact on innovativeness (six or above) – actuals v. previous year actuals


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Actual

(%)


(%)Innovativeness 29.1 24.7 23.2 23.5 0.3

Among the group of respondents seeking to grow their business, 44.8% rated the department’s impact on innovation in their industry as moderate to significant. This highlights that our impact on the key group who will drive the future growth of the sector is positive.

It is noted that there was a significant increase in the rating of the department’s influence on innovation from both intermediaries (34%) and consultants (51%), compared with 2015/16 results of 28% and 35% respectively. Primary producers ratings were little changed, at 45% to 44% for 2015/16 and 2016/17 respectively. The department considers it met this performance indicator.



Effectiveness indicator 4: Proportion of businesses that consider DAFWA has positively influenced the sustainability of the sector

The final effectiveness KPI relates to our impact on the environmental sustainability of the agrifood sector. Of the total respondents, 47.7% rated our impact as moderate to significant, a small increase over the 2015/16 result of 47%, and higher than our 2016/17 target of 43% (Table 14).

Table 14 Respondent ratings of DAFWA’s impact on sustainability (five or above) – actuals v. target


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Target

(%)

2016/17 Actual

(%)

Variation(%)

Sustainability 60.5 46.9 47.0 43.0 47.7 4.7

Table 15 Respondent ratings of DAFWA’s impact on sustainability (six or above) – actuals v. previous year actuals


2013/14(%)

2014/15(%)

2015/16(%)

2016/17 Actual

(%)


(%)Sustainability 37.5 28.6 27.0 31.5 4.5

The department’s work under this indicator has changed over the past few years, noting that structural change within the department resulted in it having to re-consider its approach to working with industry, while also delivering on its core regulatory functions such as biosecurity. The department believes that its revised strategic direction and approach is a key factor improving its effectiveness in delivering targeted programs and projects. The department considers it has met this performance indicator.

Assessing our efficiency

The efficiency with which we undertake each of our Services is estimated by the same two indicators: the net cost of each service as a factor of the gross value of agricultural production (GVAP); and the extent of co-investment we attract to each Service. We first reported our performance against these KPIs in our 2012 report.

Changes to our outcome based management framework

In January 2016, the department adopted a new parliamentary reporting structure which was first presented in the 2016/17 State Budget. The principal changes included as part of the new structure were the replacement of the existing three services with six new services (detailed below), and the addition of a third state government goal — ‘Financial and Economic Responsibility’. The changes seek to provide parliament and our stakeholders with greater detail and more meaningful information on the department’s services.

Unlike the effectiveness indicators, this report only considers the six new Services as there is no direct alignment between these and the former three Services. Therefore, we are unable to recast prior years’ comparatives.

http://www.abs.gov.au/AUSSTATS/[email protected]/mf/7503.0



1. Net Service cost as a factor of GVAP

This indicator compares our investment in each Service area with the GVAP for Western Australia as calculated by the Australian Bureau of Statistics (ABS).

The GVAP figure used in these KPIs of $7.8 billion represents the average of the past five years of published GVAP values. The average is used to minimise the annual variability that results from seasonal and other influences. This value continues the upward trend of the GVAP five-year average in WA.

GVAP understates the overall economic activity of the sector, as it does not include activity that happens past the farm gate. However, it is the most consistent, independent and broadly based benchmark relevant to the sector.

GVAP varies significantly between the years as a result of climatic, marketing and other influences. WA’s GVAP for 2015/16 (the most recent figure available) was $8.2 billion. Although lower than the 2013/14 result of $8.6 billion, it is an improvement on the 2014/15 result of $7.9 billion.

The net cost of service represents funding provided to the department by the state government, less revenue returned to government by the department through fees, charges and sales.

A reduction in this KPI represents a more efficient service in that a smaller investment by government is linked to increased economic activity for the state.

2. Co-investment in DAFWA-led initiatives related to net cost of service

Co-investment is used here as an indicator of our efficiency in leveraging the state government’s investment by partnering with other parties — across other governments, industry and the community — to invest in the same strategic goals we seek to achieve.

We do not include funding from the RfR program as ‘co-investment’ in this context because it is sourced from the state government. However, we do include third party funding linked to individual RfR projects.

Co-investments may be provided in the form of cash or in-kind contributions.

An increase in this KPI represents a more efficient service.

Service 1: Market development, investment and market access

This Service is about helping WA agrifood businesses increase their attractiveness to markets by developing the marketing and business arrangements they need to remain competitive in global and domestic markets.

This involves facilitating coordinated growth initiatives and aligning leading suppliers with the most capable in-market partners. The work across the value chain aims to ensure that markets see a strong value proposition in dealing with WA companies.



Efficiency indicators

1.1 Net service cost as a factor of GVAP

Table 16 shows that the net cost of this Service represented 0.26% of the gross value of Western Australia’s agricultural production. This is a better result than our target of 0.30%, and appears to be as a result of a more efficient service delivery model, and an increase in Western Australia’s GVAP five-year average. The department considers that it met this indicator.

1.2 Public and private sector co-investment in DAFWA-led initiatives related to this Service as a factor of the net cost of this Service

Co-investment in this Service was equivalent to 11.6% of the net funding provided by the state government, below our target of 15% (Table 16). As we were 3.4% short of our 2016/17 target, we did not meet this indicator. Market development, investment and market access is considered critical to enabling the growth of the agrifood sector, particularly in Asia, and highlights the need for the department to play a bigger role in attracting investment in this Service.

Table 16 Market development, investment and market access

2016/17 Target

2016/17 Actual

Variation

Net cost of service (% of GVAP)

0.30 0.26 –0.04

Co-investment in this service (% of NCoS*)

15.0 11.6 –3.4

Source: DAFWA, ABS; *NCoS = net cost of service

Service 2: Productivity improvement and innovation

This Service involves helping businesses optimise the technical side of their business by increasing the volume and cost effectiveness of their products.

It is aimed at helping businesses deliver the products that make the best, sustainable use of their skills and resources. It involves working with producers and processors across the value chain to improve products and production systems, or adopt new ones, with greater potential for growth; and providing related decision-making tools. The department considers that it met both efficiency indicators for this service.



Supporting productivity improvement and innovation, such as the use of technology and automation, is essential to driving growth and profitability across the agrifood sector. This year’s result of 0.27% improved on our 2016/17 target of 0.30% (Table 17). While it is acknowledged that a lower net service cost as a factor of GVAP represents a more efficient service, we expect expenditure on this Service to increase in the future as we seek to increase the agrifood sector’s contribution to the state’s economy.




Table 17 shows that co-investment in this Service was equivalent to 69.7% of the net funding provided by the state government, well above our 2016/17 target of 45% (Table 17). Productivity improvement and innovation is a key service in supporting and enabling growth and productivity across the agrifood sector. This result highlights that industry supports the state government’s investment in this service, and the growth and productivity outcomes that it delivers.

Table 17 Efficiency indicators for DAFWA’s Productivity Improvement and Innovation Service

2016/17 Target

2016/17 Actual

Variation


0.30 0.27 –0.03


45.0 69.7 24.7


Service 3: Business development and promotion

This Service relates to the department’s focus on the commercial components needed for success — facilitating investment ready value chains, and business skills and knowledge based on the latest information.

It involves working with agrifood businesses to refine their existing commercial structures and arrangements or, where necessary, to adopt new ones better suited to their future needs.

The Service supports businesses in their efforts to increase the quality and marketability of their existing and emerging products, and manage associated business risks.



Table 18 shows that the net cost of this Service represented 0.16% of the gross value of Western Australia’s agricultural production, an improvement on our 2016/17 target of 0.20%. We expect expenditure on this Service to increase in the future, with particular attention focused on developing a value-adding sector for exporting WA’s premium agricultural produce. The department considers that it met this indicator.




Co-investment in this Service was equivalent to 21.7% of the net funding provided by the state government, below our target of 25% (Table 18). While we did not meet this KPI, we believe that we will be able to better demonstrate to industry the benefits of investment in this Service to increase the effectiveness of their business systems, practices and relationships.

Table 18 Efficiency indicators for DAFWA’s Business Development and Promotion Service

2016/17 Target

2016/17 Actual

Variation


0.20 0.16 –0.04


25.0 21.7 –3.3


Service 4: Productive natural resources

This Service is about supporting the productive capacity of the natural resources and biological assets that underpin the economic development of the sector. Healthy land, soil, water, native vegetation and biodiversity are essential to both the viability of the agrifood sector and its contribution to the state.

The department aims to ensure that industry is able to grow while responsibly managing resources and biosecurity. This involves working with other agencies, industry and communities to develop coordinated approaches to assessing, funding and managing critical threats.



The net cost to the state government of this Service in 2016/17 represented 0.07% of the gross value of Western Australia’s agricultural production, a significant improvement on the 2016/17 target of 0.20% (Table 19). However, the reduction in net cost was largely due to costs associated with the RfR Gascoyne Food Bowl Initiative being capitalised rather than expensed. The target was set on the basis that these costs would be recorded as expenses. Further information on this change can be found in the notes to the financial statements section of this report. The department considers that it met both efficiency indicators for this Service.




Co-investment in this Service was equivalent to 100.1%, well above the 2016/17 target of 35% (Table 19). While we are satisfied with the level of investment we were able to attract to this Service, and consider this KPI to be met, it is noted that the 2016/17 result is over-stated as a result of the RfR Gascoyne Food Bowl initiative being capitalised rather than expensed.

Table 19 Efficiency indicators for DAFWA’s Productive Natural Resources Service

2016/17 Target

2016/17 Actual

Variation


0.20 0.07 –0.13


35.0 100.1 65.1


Service 5: Biosecurity and product integrity

This Service relates to the department’s legislative and regulatory responsibilities (such as biosecurity, animal welfare and emergency response); and its role in developing product integrity – one of our foremost advantages in global agrifood trade.

It aims to provide the information and services stakeholders need to understand the value and potential of our agrifood products and industries. This includes addressing consumer preferences regarding food safety, reliability of supply and ethical production.



Table 20 shows that the net cost to the state government of this Service in 2016/17 represented 0.64% of the gross value of Western Australia’s agricultural production, an improvement on the 2016/17 target of 0.80% (Table 20). As previously detailed, 2016/17 is the first year in which our department is reporting against a revised parliamentary reporting structure. While we met this KPI, we will continue to refine our targets to ensure we are delivering this Service as efficiently and effectively as possible.




Table 20 shows that co-investment expenditure related to this Service was equivalent to 11.0% of state government expenditure on this Service, well below our 2016/17 target of 25%. Our inability to meet this KPI is likely a result of setting our 2016/17 target too high (noting 2016/17 is the first time we have reported against this Service), with some biosecurity activities — such as supporting the productive capacity of our natural resources — also being captured under Services 2, 3 and 4. Nonetheless, we note the importance of biosecurity to unlocking the growth potential of the agrifood sector, and acknowledge that we need to work harder to engage industry and ensure that biosecurity activities are adequately funded. We did not meet this KPI.

Table 20 Efficiency indicators for DAFWA’s Biosecurity and Product Integrity Service

2016/17 Target

2016/17 Actual

Variation


0.80 0.64 –0.16


25.0 11.0 –14.0


Service 6: A business environment for growth

This Service is about the department’s leadership in partnering with stakeholders across the regulatory, policy and planning settings affecting the agrifood sector.

It involves working with relevant organisations at all levels to ensure legislation, policies and practices support sustained industry growth while safeguarding the long term interests of the sector and State.

It requires building the combined ability of governments, industry and the broader community to develop the sector, while dealing with biosecurity and natural resource risks.



Table 21 shows that the net cost of this Service represented 0.53% of the gross value of Western Australia’s agricultural production, higher than our 2016/17 target of 0.50%. This is primarily as a result of an increase in expenditure (of $12 million) to facilitate a potato industry adjustment payment, from the RfR fund, following the close of the Potato Marketing Authority. As this payment was not reflected in the 2016/17 target, we did not meet this KPI. However, it is noted that if this one-off expense was removed from the net service cost, the 2016/17 actual would have equated to approximately 0.37%, better than our target of 0.50%.




Co-investment expenditure related to this Service was equivalent to 7.8% of state government expenditure on this Service, and below our 2016/17 target of 10% (Table 21). While we did not meet this KPI, it is noted that the 2016/17 result was impacted by the potato industry adjustment payment (as detailed above), which was not factored into the 2016/17 target. It is noted that if we were to exclude this payment, co-investment would have equated to approximately 11.1% of expenditure, slightly better than our target of 10%).

Table 21 Efficiency indicators for DAFWA’s Business Environment for Growth Service

2016/17 Target

2016/17 Actual

Variation


0.50 0.53 0.03


10.0 7.8 –2.2


End of audited Additional KPI information section.

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153

The Smart way to protect grains cropsphone app and an advanced identification tool — to improve early detection and diagnosis of endemic crop pests and diseases.

The automatic traps, which will be placed in crops around the grainbelt, use technology such

Technologies like Smart detection and diagnosis can significantly aid extension capacity and return on investment for growers who need real-time decision-making tools.” – Tim Boyes, agVivo agronomist“

as cameras and mini-computers linked to the internet, to allow real-time identification of pests, such as moths and aphids, as well as the canola disease sclerotinia.

The MyPestGuide CropScout phone app — due for release in the second half of 2017 — has been developed to help grain growers to monitor crops over increasingly large farming properties. The app simplifies and accelerates surveying for cabbage and turnip aphids in canola, and will be used as a model for future applications.

We also started using Loop-mediated isothermal amplification (LAMP) technology to increase the speed and accuracy of the diagnosis of pests and diseases such as green peach aphid and

beet western yellows virus in the field. LAMP detects plant viruses at a molecular level, amplifying DNA, to provide an early warning system in association with traditional diagnosis tools.

The research is part of the RfR-funded Boosting Grains Research and Development project.

It also links with a new Australian Government Rural Research and Development for Profit project that will provide a foundation for a nationwide surveillance network.

Our department is getting smart when it comes to using technology to protect valuable crops against pests and diseases.

During the year, we explored a high-tech, multi-layered approach — incorporating an array of automatic traps, a smart

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Smart array crop monitoring with Development Officer Dusty Severtson and Research Officer Brenda Coutts

https://www.agric.wa.gov.au/r4r/boosting-grains-research-and-development-royalties-regions

https://www.agric.wa.gov.au/r4r/boosting-grains-research-and-development-royalties-regions



Ministerial directivesNo Ministerial directives were received during the financial year.

Other financial disclosures

Pricing policies of services providedDAFWA charges on a full or partial cost recovery basis for some goods and services, with fees and charges determined in accordance with costing and pricing of government services published by the Department of Treasury. The 2016/17 list of fees and charges was implemented on 1 July 2016.

Services may be exempted from charges where, for example, services are deemed essential for a competent analysis of a problem by an officer; the service relates to an outbreak of a suspected exotic disease; or the service involves approved research or surveillance.

Equipment replacement program and capital works

Core research, business and field capital equipment, together with capital works, are procured and delivered through an annual rolling program. Completed capital works included upgrades related to laboratories, glasshouses and netted field plots at Northam and Katanning as well as staff accommodation and the power generation plant at the Eucla and Kununurra quarantine border checkpoints respectively.

Property rationalisation program

Our Strategic Asset Plan identifies surplus properties in metropolitan and regional areas. Surplus properties are progressed for sale or transfer through the whole-of-government property disposal program.

Government Building Training Policy

The department does not enter into building and construction contracts; these are managed by the Department of Finance, Building Management and Works (BMW), on our behalf and will therefore be reported on in their annual report.

Minor maintenance work may be contracted in the regions but these contracts would be below the $2 million threshold.

Capital worksTable 22 Capital works projects

Year of completion

Approved budget 2016/17$’000

Total cost (estimated)

$’000

Cost variation $’000

Explanation of variation

Capital projects completed

Equipment Replacement Program & capital works

2017 4044 4169 125 Includes approved 2015/16 carry over of $125 000



Employment and industrial relationsTable 23 Staff profile and work classification profile (FTE)

Staff profile (average FTE over the year) 2017 2016

Full-time permanent 713 729

Full-time contract 120 101

Part-time permanent 97 95

Part-time contract 49 36

On secondment in from other agencies 6 3

On secondment out to other agencies 5 9

Total 990 973

Corporate support reformWe are effectively managing our resources in response to the state’s budget position, including the agency expenditure review and the public sector workforce renewal policy.

Fourteen staff ceased employment in 2016/17 through voluntary severance.

The severance decisions were based on our department’s financial position and identification of where effort should be reduced or ceased. In the departure of these staff, we ensured ongoing communications between affected staff and unions, captured corporate knowledge, and maintained key client relationships.

Through continued workforce planning, we are reassigning staff to support mission-critical positions and high-priority functions.

Workplace reformConsistent with government policy on labour relations, we have an Agency Specific Agreement (ASA). This agreement provides our department and staff with mutually beneficial conditions of employment and cost-effective work practices. A process of continuous review of conditions of employment and work practices occurs in consultation with staff, managers and unions. The parties have agreed to continue the existing ASA arrangements.

1500

0

900

1200

600

300

2013 2014 2015 2016 20172012

Num

ber o

f FTE

s

Figure 6 FTE levels at 30 June 2012–17



Employee developmentWe continue to develop and maintain a highly skilled, professional and equitable workforce, able to adapt to changing technology, knowledge and environments.

Key activities during 2016/17 included:

• commencing the graduate development program for the 2017 intake, focusing on developing their skills for working in organisations, such as influencing with tact and integrity and developing effective presentations. In addition, the five graduates gained an appreciation of the diversity of the agrifood sector and a greater understanding of our efforts in delivering the Agrifood 2025+ Strategic plan 2014–17 through a week-long tour of the central and southern regional offices

• maintaining strong commitment to building the leadership and management capabilities of our staff, in particular people leaders and project managers, through the delivery and support of a number of programs, including the Certificate IV in Leadership and Management; Diploma of Project Management; Leadership WA Signature and Rising Leadership; Public Sector Commission’s Leadership and Management Essentials; Women in Leadership Summit; and the CEDA Copland Leadership program

• continuing to develop and refine units of competency within the Certificate III in Public Safety (Biosecurity Response Operations) and the Diploma in Public Safety (Biosecurity Response Management) by liaising with internal and external biosecurity emergency response experts to further align the qualifications to the training needs of the agrifood sector. In 2016/17, 137 staff graduated with either a Certificate III or Diploma in Public Safety, strengthening DAFWA’s emergency response capabilities

• building staff preparedness for change through support and training in the areas of personal financial management; selection criteria and resume writing skills; and building resilience through times of change

• running the annual contact and grievance officer conference for staff who volunteer to assist with the resolution of workplace grievances. The conference focused on workplace change and skills for adapting to change; as well as addressing sexual harassment and bullying in the workplace

• reviewing DAFWA policies, procedures and training manuals in relation to staff recruitment and selection skills to ensure current standards are maintained and to further develop the necessary skills in recruiting staff efficiently and effectively

• increasing staff capability in technical and scientific writing to ensure reports they write are clear, concise and technically sound

• commencing a policy capability initiative to develop and ensure policy excellence to support the achievement of our strategic direction. More than 80 staff have been trained in Ministerial writing and more than 40 staff in ‘Influencing for Impact, Designing for Success’, with particular focus on group facilitation. A professional development network for policy staff has been established to provide regular updates and information on policy activities across our department

• meeting or exceeding compliance rates for online essential training and associated refresher programs, as shown in Table 24 on p. 157.

https://www.agric.wa.gov.au/strategic-plan-2014–17

https://www.agric.wa.gov.au/strategic-plan-2014–17



Table 24 Essential staff training completion rates

Essential training Actual^%

Target* %

Accountable and ethical decision making 98 98

Recordkeeping awareness 98 98

Cultural awareness 98 98

EEO Awareness – general staff 98 98

Driver safety 99 98

OSH 99 98

^ Actual as at 30 June 2017

* Excludes staff in DAFWA for less than six months, trainees, cadets and board members

Staff sustainability project

This project is designed to attract, engage and retain a talented and committed workforce that meets our business needs. Our Quality of Life initiative promotes a working environment that is supportive of staff in nine areas, including family, health, personal growth and community.

Key achievements for 2016/17 were:

• continued support for at-work flu vaccinations (almost 100 staff vaccinated)

• provision of seminars, one-on-one sessions and information on superannuation and retirement planning to assist a positive transition to retirement

• continued support of the Bank Your Blood program, in which staff donate blood to the Australian Red Cross

• promotion of salary packaging options

• provision of one-on-one sessions and information on health insurance

• completion of skin cancer checks for nearly 500 staff (see p. 170).

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Significant issues AppendixContents Overview Disclosures and compliance 158Performance


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On the road to strengthen animal disease surveillance

WA’s reputation as a supplier of high-quality, disease-free livestock relies on being able to show that our state is free of trade-sensitive animal diseases such as foot-and-mouth.

Surveillance training is an important tool in upholding this reputation.

In the past year, DAFWA veterinarians travelled across the state to run emergency animal disease and surveillance training workshops for private vets and key livestock industry stakeholders.

Private vets are key partners at the frontline of animal disease surveillance.

More than 70 vets joined training workshops in Broome, Bunbury, Albany, Kojonup, Dongara and Perth.

The training covered topics such as emergency animal disease recognition and investigation, sample collection requirements and practical techniques for field post-mortems.

The workshops aimed to strengthen the private sector’s capacity to confirm the cause of on-farm animal health issues as well as reinforce the importance of ruling out certain diseases. This increased capacity will help to improve the profitability of farm businesses and support our market access for livestock by providing evidence of disease freedoms.

The workshop was excellent. My sample selection techniques will definitely improve and DAFWA’s support for testing and case follow-up is very helpful.” – Dr Kerri Jurgens, Collie Veterinary Services

“

DAFWA’s veterinary staff with private veterinarians and key stakeholders at the emergency animal disease workshop in Broome

WA exported around 80% of livestock and livestock product worth $2 billion in 2015/16 — and access to overseas markets is critical to livestock producers.

In addition to workshop training, DAFWA continues to offer a subsidy to producers that encourages disease reporting through private veterinary investigation.



Governance disclosures

Contracts with senior officersNo senior officers or firms of which senior officers are members, or entities in which senior officers have substantial interests, had any interests in existing or proposed contracts with our department during the financial year.

Shares held by the departmentOur department does not hold shares in any subsidiary body as defined by s. 60 of the Financial Management Act 2006.

Audit and Risk CommitteeDAFWA’s Audit and Risk Committee advises the Director General and the Executive on the application and promotion of good governance throughout the organisation. The committee’s role is to review and provide advice on governance processes with a focus on control, risk management, follow-up of audit recommendations and oversight of internal audit functions.

The committee meets quarterly with regular attendees, including a senior officer from the Office of the Auditor General, and the Director of Audit and Integrity.

Four Audit and Risk Committee meetings were held this year.

Table 25 Audit and Risk Committee members and meetings attended

Member Meetings attended 2016/17

Mark Webb, A/Director General DAFWA 4

Mark Sweetingham, A/Director General DAFWA 1

Keith Van Dongen, an independent member and Executive Director, Corporate Services, Department of Fisheries

3

Alain St Flour, an independent member and Executive Director, Finance, North Metropolitan Health Service

4

Andrew Harvey, an independent member and Deputy Inspector, Office of the Inspector of Custodial Services

2

Graham Edwards, an independent member and A/Director, Corporate Services, Department of Parks and Wildlife

3

Enterprise risk managementDAFWA is committed to effective risk management to support our operational and project objectives. Our risk management framework is aligned to ISO 31000, Treasurer’s Instruction 825 and the Public Sector Commissioner’s Good Governance Guide and Circulars.

Our Executive team and Audit and Risk Committee regularly monitor the completeness and effectiveness of the risk management framework.



Finance CommitteeThe Finance Committee was established in December 2009 and meets monthly. The committee members are the Director General, the Chief Finance Officer and all Executive Directors. The committee’s role is to:

• determine options to address funding pressures within the department

• provide advice with respect to making significant financial decisions

• understand the status of program, tactic and priority resource investments, highlighting resourcing issues

• determine the disbursement of financial and FTE (people) resources.

Unauthorised use of credit cardsDAFWA is required to report on instances where a DAFWA-issued government purchasing card (‘a credit card’) was used for personal use.

Table 26 Unauthorised use of credit cards 2016/17

Description Quantity/value

a) Number of instances credit card used for personal use expenditure

52

b) Aggregate amount of personal use expenditure $7015.34

c) Aggregate amount of personal use expenditure settled by due date

$6515.56

d) Aggregate amount of personal use expenditure settled after the due date

$499.78

e) Aggregate amount of personal use expenditure outstanding at the end of the period

$0



Other legal requirementsCompliance with public sector standards and ethical codesCompliance issues that arose during 2016/17 regarding public sector standards (i.e. breach claims):

Table 27 Compliance issues/breach claims

2015/16 2016/17

Applications carried over 0 0

New applications received 0 4

Total applications 0 4

Breach claims lodged

Recruitment, selection and appointment 0 4

Transfer 0 0

Grievance resolution 1 0

Outcome of claims handled

Withdrawn in agency 0 1

Resolved in agency 0 1

Still pending in agency 0 0

Referred to Public Sector Commission 1* 2*

Total applications completed 1 4

* The Public Sector Commission dismissed these claims.

Compliance issues that arose during 2016/17 regarding public sector standards (i.e. discipline):

a) One matter was dealt with in accordance with the breach of discipline process pursuant to the Public Sector Management Act 1994, which resulted in termination of employment.

b) Action taken to monitor and ensure compliance included:

• reporting and monitoring misconduct matters through our Integrity Committee to identify systemic issues

• a series of staff communications in November and December 2016 to provide guidance to staff on how to avoid situations that may compromise their integrity as a public servant or obligations under our Code of Conduct

• ongoing review and updating of internal policies to ensure consistency with changes to legislative instruments that regulate public sector employment

• review of our Code of Conduct• mandatory requirement for all staff to complete the accountable

and ethical decision-making online course annually• responding to allegations of misconduct as they arise.



Ethics and integrityDAFWA promotes ethical behaviour and integrity. All new employees are required to complete an online induction course that contains modules on ethics, integrity and the requirements of the Public Interest Disclosure Act 2003 (PID Act).

All staff are required to complete the online training course in accountable and ethical decision-making annually in an effort to further highlight the importance of the subject matter. We also require all employees (with a refresher every three years) to complete the equal employment opportunity (EEO) awareness course and recordkeeping awareness, which reinforce aspects of ethics and integrity. Training for contact and grievance officers also includes modules on ethics and integrity.

Our Integrity Committee provides assurance to the Director General that matters relating to systemic risks are identified and managed. The Integrity Committee monitors issues including, but not limited to, matters referred to the Corruption and Crime Commission, Public Sector Commission or reported under the PID Act.

Freedom of informationA description of the types of information and documents we hold and how to access information under the Freedom of Information Act 1992 (FOI Act) is contained in the Information Statement available on our department’s website.

There was a significant increase in applications received by DAFWA in 2016/17, mostly lodged by potential purchasers or lessees seeking information in relation to a particular property. Among other things, applicants were seeking information about whether a property had any

notices in effect under the Biosecurity and Agriculture Management Act 2007 that might impact a new owner. After reviewing our practices around the release of this type of information, DAFWA decided to make it publicly accessible via a Property Interest Report, which can be purchased from Landgate.

Table 28 Freedom of information applications 2016/17

FOI 2016/17

Applications carried over 1

New applications received 149

Total applications 150

Application outcome

Applications transferred in full 0

Applications withdrawn 5

Total applications completed 143

Applications outstanding at 30 June 2

Application types

Personal information requests 2

Non-personal information requests 147

Request to amend personal information 0

http://www.agric.wa.gov.au/sites/gateway/files/Information%20statement%20-%20Freedom%20of%20Information%20Act%201992.docx



Complaints handlingOur Customer Complaints and Feedback Policy helps to ensure complaints are handled fairly and efficiently. Customers are encouraged to lodge their concerns via the Customer complaint and feedback form on our website.

Our complaints handling policy and procedures are consistent with principles outlined in AS ISO 10002-2014, as required by the Public Sector Commissioner’s Circular 2009-27.

Where a complaint is unable to be resolved at the initial point of contact, the department sends written acknowledgement to the customer within five working days. The customer is notified of the name and title of the officer responsible for investigating their complaint and the expected timeframe for resolution. Once an investigation has been conducted, the complainant is advised of the resolution. If they are dissatisfied with the outcome, they are referred to an appropriate external body.

Our department also promotes the use of the National Relay Service (NRS) on our website and intranet so people with speech, hearing and visual impairments have the same ability to make complaints as everyone else. Our internal procedures remind staff of the availability of the NRS should it be required.

Table 29 Complaints received 2016/17

Types of complaints received 2016/17

Regulatory 2

Information accuracy and timeliness 1

Negligence/misconduct 7

Financial 0

Total 10

We aim to resolve all complaints within 30 calendar days. Seven of the complaints received in 2016/17 were resolved within this timeframe to the satisfaction of the complainant. These complaints brought issues to the department’s attention and in doing so allowed us to improve our service delivery.

Three complaints were outstanding as at 30 June 2017.

Recordkeeping plansThe DAFWA Recordkeeping Plan (RKP 2015029) was approved by the State Records Commission in 2015. It is due for review by 26 November 2020.

Our Functional Retention and Disposal Schedule RD 2011014 was approved by the Commission in 2011 and was due for review in 2016. The update to the schedule began in late 2016 and was in progress as at 30 June 2017.

http://www.agric.wa.gov.au/form/customer-complaint-and-feedback-form

http://relayservice.gov.au/



DAFWA has a department-wide electronic document and records management system (EDRMS), which allows for efficient information sharing between staff and appropriate security and management of government records. Adjunct solutions adopted around the EDRMS allow secure sharing with external organisations and secure workflows for formal approval and endorsement of documents.

The EDRMS contained 3.5 million objects as at 30 June 2017. The EDRMS was upgraded in June 2017 and now has additional functionality, including a web-based browser interface and improvements to the secure file-sharing module.

All staff are required to undertake an online recordkeeping awareness course as part of the induction process. Further training and ongoing support is available from the document and records management team. Comprehensive information about recordkeeping policies and procedures, including statutory obligations, is available to staff via our intranet.

Research Library

The DAFWA Library contains a considerable collection of historical and new research papers and other grey literature published by the department since its creation in 1898. This material is of considerable economic, educational and social value. To ensure the research can be accessed by researchers, industry, the public and other staff, the library has developed an online digital repository to house this collection. The DAFWA Research Library is accessible to the public from our website homepage. To date, 1560 resources have been added, with about 200 downloads a day.



Expenditure on advertisingIn accordance with section 175ZE of the Electoral Act 1907, the department reports incurring expenditure in relation to advertising agencies, market research, polling, direct mail and media advertising organisations. Total expenditure for 2016/17 was $169 928.

Table 30 Expenditure on advertising, market research, polling, direct mail and media advertising 2016/17

Advertising $ASB Marketing Pty Ltd 11 309Carat Australia Media Services Pty Limited 30 990Cussons Media Pty Ltd 21 678Offshoot Creative 19 127Ryan Media Pty Ltd 191Total 83 295Market research organisations $Nil –Polling organisations $Nil –Direct mail organisations $Campaignmonitor.co 542Createsend.com 1 895Direct Mail Solutions 16 935Email Media 150SEM Distribution 36

Total 19 558

Media advertising organisations $

Adcorp Australia Ltd 57 396

Agricultural Publishers Pty Ltd 1 153

City of Greater Geraldton 15

Facebook 692

Fairfax Media 519

Farm Guide Pty Ltd 5 050

Google 356

Gumtree Australia 34

Kellerberrin Newsletter – The Pipeline 6

Merredin Community Resource Centre Inc. 273

Shire of Trayning 18

Southern Cross Austereo 708

Australian Veterinary Association 727

The Fence Post Newspaper Inc. 30

The West Australian 68

Windmill Community Newspaper Inc. 30

Total 67 075



Equity and diversityIn 2016/17 we continued to promote and encourage diversity within our workforce through three key plans, comprising the:

• Workforce and diversity plan 2016–18

• Disability access and inclusion plan 2015–19

• Reconciliation action plan 2015–18.

Key achievements for 2016/17 were:

• continuing to support the employment and career development of youth and women with a graduate intake in February 2017. Five graduate positions were filled by women. Positions included a client engagement support officer, veterinary officer, development officer and two policy support officers

• celebrating women in leadership by hosting an event for International Women’s Day, featuring a panel discussion with four women recognised as leaders in WA’s agrifood sector

• requiring all staff to complete regular equity and diversity refresher training (first round completed by 30 June 2017) to support knowledge of relevant processes and legislation

• celebrating NAIDOC Week, including a flag-raising ceremony as well as a Welcome to Country and didgeridoo playing by acclaimed Aboriginal performer Olman Walley

• appointing a Level 1 Aboriginal youth via the Public Sector Commission’s Traineeship Transition to Employment, Recruitment and Referral Service (TTERRS)

• developing an innovative new recruitment process for Aboriginal and Torres Strait Islander staff, incorporating targeted advertising and an application process briefing session. The process was successfully implemented for a technical officer position at Northam during the year.

Our Disability access and inclusion plan (DAIP) provides strategies for the inclusion of clients and staff with disability through improved access to information, services and facilities.

Key achievements in relation to the DAIP include:

• maintaining the DAIP working group, comprising representatives from all directorates who meet regularly to monitor the implementation of the DAIP 2015–19

• hosting a trainee with a disability through the Public Sector Commission school-based trainee program. The trainee, who will complete a Certificate II in Government, is based in the Organisational Development and Training Unit and participates in administrative tasks associated with equity and diversity and corporate training

• continuing to support employment for people with disability by contracting two Western Australian Disability Enterprises: Intelife Group undertakes commercial cleaning services at our South Perth site while Activ looks after garden and grounds maintenance at South Perth, Bunbury, Esperance and Geraldton

• issuing a series of staff communications to raise awareness and promote our DAIP and the National Relay Service as well as provide information on how to make events accessible and produce documents in alternative accessible formats

https://www.agric.wa.gov.au/disability-access-and-inclusion-plan-2015-19



• demonstrating our commitment to raising awareness of people with disability in the workplace and community as part of Disability Awareness Week (27 November – 3 December 2016) and International Day of People with Disability (3 December 2016) by holding a morning tea for staff at our South Perth office. It included an exhibition of artworks by artists with disability from a not-for-profit community arts and cultural development organisation. Regional locations also hosted a range of activities

• reviewing online training courses to ensure they are accessible for staff with disability. Accessible online learning management system guidelines were developed and made available to all staff

• planning and undertaking building works at our Central region offices (Geraldton and Northam), including: – upgrades to reception areas to include wheelchair access– maintenance of wheelchair access to entry points– upgrade and review of disability car parking– ensuring disability access is maintained during building works,

including establishing ongoing communication processes and procedures for employees with disability.

• having procedures in place to ensure the DAIP policy is referenced in relevant tender documents. We informed agents and contractors by providing a link to our DAIP on our website.



Government policy requirementsOccupational safety, health (OSH) and injury management

Performance

Table 31 Occupational safety, health and injury management performance

Performance measure 2014/15 2015/16 2016/17 2016/17 government target Target achieved

Number of fatalities 0 0 0 0 Yes

Lost time injury/disease incidence rate 1.03 0.62 0.51 0 or 10% improvement over 3 years

Yes

Lost time injury severity rate 27.3 33.3 20.0 As above Yes

Percentage of injured workers returned to work within 26 weeks 961 752 823 Greater than or equal to 80% return to work within 26 weeks

Yes

Percentage of injured workers returned to work within 13 weeks 891 752 553 Actual percentage Yes

Percentage of managers trained in OSH and injury management 97 99 99 80% or greater Yes

Based on calendar year (1) 2014, (2) 2015, (3) 2016

• revising processes and procedures for bushfire warnings• developing new site emergency information for our intranet and

warning posters at South Perth.

Our commitment to OSH and injury management

DAFWA has a general OSH Policy, 30 other policies covering OSH systems and hazards, and one policy on injury management and workers’ compensation. Most of these policies have been in place for more than a decade and are reviewed at least every three years. Any initiatives required for new or reviewed policies are determined by the OSH Policy Committee and are included in our annual OSH initiatives. OSH and injury management targets are also included in the strategy.

Key achievements and initiatives in 2016/17

The work of our OSH Unit included:

• implementing recommendations of driving fatality risks• completing review of quad bike fatality risks• commencing review of tractor fatality risks• implementing high-risk controls for South Perth laboratories• commencing a risk review of the Albany laboratory• carrying out skin cancer screening for 500 staff (see p. 170)• completing review of vehicle roo bar requirements• launching a customised OSH online course



Changes to policy are communicated to all OSH committee chairs, OSH representatives and relevant managers immediately after each policy committee meeting. All policies are available on our intranet and all new staff members are made aware of the location of policies and other OSH information through the induction process.

Executive commitment is demonstrated by:

• having defined Executive Director OSH roles and responsibilities

• monitoring of quarterly and annual OSH performance reports

• prioritising funding for facilities, machinery and equipment

• supporting and participating in mandatory OSH training

• supporting annual OSH initiatives

• undertaking reviews of OSH systems.

Consultation on OSH and injury management

Our department has a two-tier system of consultation. The OSH Policy Committee is responsible for policy, strategy and monitoring performance. This committee comprises managers and regional OSH representatives. The second tier comprises local committees in larger regional offices and staff meetings in smaller offices. Quarterly committee and staff meetings consider incident, hazard and inspection reports and actions raised by the policy committee.

There are elected OSH representatives in each regional office. Staff members are made aware of their local and regional OSH representatives through local OSH induction.

Compliance with injury management requirements of Workers’ Compensation and Injury Management Act 1981

Our department’s injury management system and return-to-work program are documented in our injury management policy and supporting guidelines. We have an early intervention injury management program that exceeds the requirements of the Act.

OSH and injury management systems

An accredited consultant carried out a required five-yearly WorkSafe Plan assessment of our OSH systems in February 2013 and provided a WorkSafe Plan score of 77%.

In July 2015 an external consultant completed a health and safety framework assessment of OSH management systems and culture for the Audit and Integrity branch.

OSH training

OSH awareness training is mandatory for staff; 99% of staff had completed the training at 30 June 2017. OSH training has been delivered online since July 2016.

We continue to provide two levels of driver training and a range of skills-based training related to the use of machinery, chemicals and other processes.

I n f ocus

Significant issues AppendixContents Overview Disclosures and compliance 170Performance


Screening program ‘spot on’ for improving staff healthWith Australia having one of the highest rates of skin cancer in the world, our department is doing its bit to help protect staff.

In early 2017, we ran a free skin cancer screening program at 15 offices across the state, with almost 500 staff (about 50% of employees) taking the opportunity to get their skin checked.

The program not only helps us meet our duty of care to staff who work outdoors, but also assists in raising awareness among office staff.

We used specialists Spotscreen to conduct the screening at South Perth while local regional providers were used wherever possible.

The consultants used state-of-the-art technology (SIAscope) to increase accuracy in identifying and mapping lesions.

They also showed staff what to look for when self-checking and

provided advice on how staff could protect themselves from sun exposure at work and home.

DAFWA has run the skin cancer screening program four times since 2011 as part of our Quality of Life initiative.

Each time, there have been staff who have had potentially life-threatening cancers identified.

This year, 87 staff were referred to their GP for further assessment, including Plant Pathologist Geoff Thomas who had a melanoma identified, diagnosed and removed.

This screening hastened the discovery of this spot and has potentially been of significant benefit to my health.’ – Geoff Thomas“

A Spotscreen consultant uses an SIAscope to look for suspicious spots



Substantive equalitySubstantive equality means providing services in ways that consider people with differing needs and that create equitable outcomes for all Western Australians as far as possible.

We are committed to substantive equality, requiring all our programs to comply with the provision of the Equal Opportunity Act 1984. We seek to ensure that our services are designed and delivered in ways that meet the needs of all our clients by applying the following principles:

• serving members of the agriculture community regardless of age, race, culture, disability or gender

• seeking to meet the diverse needs of our clients by continuous review and development of service design and delivery

• ensuring substantive equality principles are incorporated into all plans, procedures and practices

• ensuring staff have the knowledge, skills and abilities to support the policy

• ensuring client services are developed and delivered appropriately and equitably.

Key achievements for 2016/17

The principles of substantive equality are reflected in our Strategic plan 2014–17 within our commitment to providing our services in ways that are accessible to all Western Australians.

Our commitment to implementing the policy framework for substantive equality in 2016/17 was shown through:

• incorporating substantive equality requirements in central training programs, including corporate induction, the Diploma Project Management and emergency management training

• translating industry updates, FAQs and quarantine area notices into Vietnamese for Vietnamese-speaking growers impacted by the discovery of the pest tomato potato psyllid (TPP)

• facilitating the establishment of the first Aboriginal producer group in Australia, Noongar Land Enterprises (NLE) (see p. 173)

• finalising a five-year beef backgrounding plan with the Beemurra Aboriginal Corporation (BAC) to provide a clear business development pathway for 2017–22

• facilitating mentorship for BAC members by a leading beef backgrounding business at Mingenew. (The mentoring resulted in BAC signing a contact with a client in February 2017 for 130 cows with calves on a summer grazing consignment.)

• providing business governance and planning advice through the Aboriginal Business Development (ABD) project to directors at the East Kimberley Cattle Company Pty Ltd that assisted with multiple investment opportunities (equity share in herd development and agistment)





• working with Aboriginal sheep producers to facilitate export supply chain linkages as part of the Sheep Industry Business Innovation (SIBI) project

• working with the Department of Aboriginal Affairs, including providing advice on property planning processes and access to broad industry networks, to enable an Aboriginal pastoral station back into production, contributing to the Kimberley beef industry and regional economy

• liaising with NLE through the eConnected Grainbelt project, which resulted in a new weather station at Wongutha Christian Aboriginal Parent-directed School to expose Aboriginal agricultural students to new technology and improve learning

• awarding Business Improvement Grants to 16 Indigenous-owned and managed northern beef properties through the Northern Beef Futures (NBF) project

• developing an NBF Indigenous strategy to engage 10 Indigenous beef enterprises in the Kimberley and Pilbara to develop a north–south supply chain and develop new supply chains for exporting heifers to Indonesia and Thailand.

https://www.agric.wa.gov.au/r4r/sheep-industry-business-innovation-project

https://www.agric.wa.gov.au/r4r/sheep-industry-business-innovation-project

https://www.agric.wa.gov.au/r4r/econnected-grainbelt





I n f ocus

Producing opportunities for Indigenous land managersAboriginal land managers across the south-west are now in a better position to pursue investment and business opportunities.

During the year, our Aboriginal Business Development (ABD) project supported the formation of Noongar Land Enterprises (NLE) — Australia’s first Aboriginal producer group.

The group brings together eight Indigenous land management groups who manage agricultural land from Bunbury to Esperance.

This has provided a much-needed unified voice for Noongar land managers to interact with industry and government departments and to pursue collaborative economic development opportunities across agrifood supply chains.

Our ABD project, which aims to assist the growth of Aboriginal agricultural businesses across the state, secured funding for NLE to undertake strategic planning to map out their vision, goals and structure.

We are excited to take this next step and see Noongar farmers joining together as a collective to attract investment to grow our businesses.” – NLE Acting Chair Oral McGuire

“ DAFWA’s Aboriginal Development Project team with members of Noongar Land Enterprises

NLE has identified unique investment solutions, which include a honey production partnership with Australian–Chinese honey company, Australian Natural Biotechnology, in which set-up costs will be covered for landholders.

NLE has also explored other property diversification ventures, including agro-tourism, carbon

farming and the production of boronia flowers, sandalwood and traditional Aboriginal bush foods.

The group is on track to secure extra funds to become self-sufficient. They have already acquired more than $100 000 and will use this to employ an executive officer and maintain momentum.



Board and committee remunerationWe support six government boards or committees. These bodies provide essential services and advice in regard to the ethical use of animals in science, biosecurity policy and the management of industry funding schemes (IFS).

Members of these bodies are remunerated on a per-meeting basis, with differing rates being applied to full and half-day meetings.

Table 32 does not list ex officio members who are DAFWA staff.

Total remuneration across all boards for 2016/17 was $176 008.

Table 32 Board and committee remuneration

Position Member AppointmentFrom to

$ paid in 2016/17

Animal Ethics Committee 10 804

Member G Mabury 3/2017 2/2021 0

Member I Robertson 12/2014 12/2017 1 838

Member S Vanstan 4/2012 2/2021 2 205

Member S Leitch 8/2013 12/2017 3 086

Member R Moore 4/2014 4/2018 3 675


$ paid in 2016/17

Biosecurity Council of Western Australia 113 956Chair K Goss 3/2012 2/2018 28 308Member D Jarvie 3/2012 2/2018 13 656Member M Allen 3/2008 12/2019 11 397Member T Thorne 1/2014 12/2019 13 656Member S McKirdy 1/2014 12/2019 13 656Member B Large 3/2012 2/2018 15 546Member C Winfield 3/2015 2/2018 17 737

Cattle IFS* Management Committee 13 763Chair S Meerwald 7/2016 6/2019 1 470Member C Forsyth 5/2012 6/2018 2 445Member R Paliskis 7/2016 6/2019 228Member W Brockhurst 7/2013 6/2019 2 967Member J Motter 7/2016 6/2019 2 475Member G Nixon 7/2013 6/2019 1 620Member M Norton 7/2016 6/2019 2 558Grains, Seed and Hay IFS* Management Committee 15 035Chair R Creagh 7/2013 6/2019 3 748Member S Woods 7/2013 6/2019 1 900Member R Day 7/2016 7/2019 1 760Member R Beard 7/2015 6/2018 1 637Member A Mutter 7/2016 6/2019 1 475Member B Jones 7/2015 6/2018 1 646Member J Sullivan 7/2015 6/2018 2 869




$ paid in 2016/17

Sheep and Goat IFS* Management Committee 22 450Chair E Rogister 7/2013 6/2019 8 653

Member J Jensen 7/2013 6/2019 3 598

Member D England 7/2016 6/2019 2 290

Member S McGuire 7/2016 6/2019 0

Member J Moyes 7/2013 6/2019 3 514

Member C Wass 7/2015 6/2018 3 435

Member G Bowen 7/2016 6/2019 960

IFS* Appointments Committee 0Chair R Gillam 5/2015 4/2018 0

Member W Cox 5/2015 4/2018 0

Member T Fisher 5/2015 4/2018 0

Member A York 10/2016 4/2018 n/a

Member A Seabrook 5/2015 4/2018 n/a

*IFS = Industry Funding Scheme

Table 32 Board and committee remuneration (cont.)



The Quarantine WA road checkpoint at Kununurra



Appendix


Margaret River vineyards Photo courtesy UAV Resources and Frances Andrijich



Statement from the Commissioner of Soil and Land ConservationA report on the Commissioner’s operations for 2016/17 is submitted in accordance with Section 25 F of the Soil and Land Conservation Act 1945.

DelegationsThe long-standing delegation of power under Part II of the Act to a Regional Manager in the Department of Water (DoW) to administer covenants under Part IV A ceased during the year. The Commissioner continues to have delegated authority from the Minister for the Environment to issue woodchip permits.

Land clearing assessmentsFifty-nine clearing area and purpose permit applications were assessed for land degradation, with advice provided to the Department of Environment Regulation (DER) for agriculture purpose clearing or to other agencies for mining-related and infrastructure development.

ComplianceThe Commissioner registered 29 complaints during the year comprising drainage (19), clearing (5), soil erosion (4) and nutrient export (1) complaints. Seven complaints are pending further investigation or monitoring of compliance with directions given.

Woodchip permitsNo woodchip permits were issued.

Agreements to reserve and conservation covenantsDuring the year, the Commissioner registered one irrevocable Conservation Covenant that protects an environmental offset of 130.5ha in perpetuity. A further four conservation covenants totalling 62.28ha were executed and are pending lodgement at Landgate by the proponents. One Agreement to Reserve was varied to permit use by mountain bikes on a defined trail. A total of 1808 instruments under the Act remain registered on certificates of title protecting 152 842ha of native and planted vegetation.

Soil conservation noticesNo soil conservation notices were issued during the year.

Land drainageIn most districts, farmer interest in constructing deep drains for the management and recovery of salt-affected land remains low. During 2016/17 only five landholders submitted Notices of Intention to Drain (NOI) and they were issued letters of ‘no objection’ to the proposed works. Pre-NOI inspections were carried out on six properties. The majority of these were in the Esperance district where farmer interest in surface and subsurface drainage remains high following the wet winters recently experienced. The level of non-compliance with drainage regulation remains unacceptably high in the Esperance district, despite local publicity and field days aimed at increasing awareness.

http://www.slp.wa.gov.au/legislation/statutes.nsf/main_mrtitle_901_homepage.html

http://www.slp.wa.gov.au/legislation/statutes.nsf/main_mrtitle_901_homepage.html



Land Conservation District Committees (LCDCs)LCDCs are statutory committees created under Part III A of the Act to manage projects and to promote practices that mitigate or prevent land degradation. At the year’s close, there were 264 gazetted members of 23 LCDCs active in the agricultural and rangeland regions. A further four committees are pending reappointment, 11 are in ‘recess’ and 25 are pending abolition.

Condition of the resource base

Agricultural regionAgricultural activities are largely confined to the South West Land Division and productivity is dependent upon the condition of the soil resource. These soils are susceptible to salinisation, acidification, soil erosion, water repellence and compaction. Waterways and wetlands are also susceptible to acid groundwater discharge, salinity, nutrient export and sedimentation from agricultural land. The combination of soil constraints, climate variability and increasing production costs is significantly impacting farm viability on the margins of the wheatbelt.

Soil acidity

Soil acidity occurs on much of the state’s agricultural land and is the most serious, long-term and preventable land degradation threat to the state’s crop and pasture production. In 2015 the economic impact of soil acidity was estimated to be $1500 million per annum or about 20% of gross value of annual production (GVAP) (A Bennett 2015, pers. comm., 3 July; Peterson, E Nov., 2015). These estimates, based on field data, represent a two-fold increase over the earlier modelled impact. Most agricultural land, except the Esperance mallee district, is in either

poor or very poor condition from a soil acidity perspective (Schoknecht et al. 2013). In 2016/17 farmers applied an estimated 1.25 million tonnes of lime. This is a reduction of about 230 000 tonnes on previous years and may be due to reduced extension effort and a tighter farm financial situation. The current level of lime application is about 50% of the estimated annual requirement to raise soil pH to desirable levels over the next 10 years.

Soil salinity

Salinity continues to have a serious impact on agriculture and offsite natural assets. By 1998 when the last assessment was carried out, more than one million hectares of farmland were severely salt affected and more than 2.8 million hectares were developing shallow watertables and were at risk. The economic impact for the period 2009–13 is estimated to be $519 million per annum or 7% of GVAP (A Bennett 2015, pers. comm., 3 July) while off-site costs are estimated to be greater (Simons, George & Raper 2013).

Increased groundwater recharge resulted from unseasonal 2017 summer rainfall. An increase in the proportion of groundwater monitoring bores with rising trends and associated salinity risk were observed in the Jerramungup Plain, Northern Zone of Ancient Drainage, Northern Zone of Rejuvenated Drainage, South-Eastern Zone of Ancient Drainage, South-Western Zone of Ancient Drainage and the Salmon Gums Mallee. It is likely that below-average winter rainfall experienced over much of the agricultural region in 2017 will moderate this risk.



Soil erosion

Water erosion is generally episodic and is caused by localised, high-intensity rainfall over the summer and autumn/early winter period. Damage is greatest where protective vegetative cover has been removed by heavy grazing pressure or cultivation.

Widespread water erosion occurred following two intense rainfall events on 29 January to 1 February and 7–12 February 2017. Damage to paddocks and infrastructure in the shires of Ravensthorpe and Lake Grace alone was estimated at $54 million (P Galloway 2017, pers. comm., 7 June).

The frequency of intense summer rainfall events appears to be increasing in the eastern and south-eastern wheatbelt where five events of between one-in-50 years and one-in-100 years annual exceedance probability have occurred during the past 20 years. Inappropriate cultivation of waterways and some controlled traffic cropping practices were identified as factors contributing to the severe soil erosion observed.

Rivers and wetlands

Diffuse nutrient pollution from agriculture is a serious land degradation problem on sandy soils of the coastal estuary catchments. Soil test data indicate the majority of soil samples taken have phosphorus (pH) levels in excess of production requirements. The excessive application of farm fertilisers is a significant cost to agricultural industry in the south-west agricultural area ($400 million, Weaver & Summers 2013) as well as having serious offsite environmental impacts.

Rangelands region

Pastoral rangelands

Rangelands comprise 87% of the state, with pastoral leases covering about 35% (874 000km2) with Unallocated Crown Lands (UCL) and land vested for conservation and Indigenous purposes making up the balance. Following the 2015 lease renewal process, there are 436 registered pastoral stations on 491 pastoral leases. There are 152 stations in the northern rangelands with 92 in the Kimberley and 60 in the Pilbara, while 284 stations are located in the southern rangelands (shrublands).

Rangeland resource condition assessment

Rangeland condition assessment in the Kimberley and much of the Pilbara is based on the frequency of perennial grasses. The density of perennial shrubs is used to determine condition in the southern rangelands. The key drivers for change in resource condition are seasonal conditions, grazing pressure and fire.

The Western Australian Rangeland Monitoring System (WARMS) was established between 1993 and 1999 to monitor rangeland condition trend at a regional scale. There are 1608 sites — 625 grassland sites and 983 shrubland sites. Grassland sites are assessed on a three-yearly cycle and shrubland sites are assessed every five years.

This report incorporates data from 2016 when 356 sites were assessed on 95 stations in the Kimberley, Pilbara and shrublands.



Seasonal conditions

The 2016/17 seasonal conditions were above average in the Kimberley. The summer rainfall, when compared with the long-term average, was highest in the Derby – West Kimberley LCD with 1100mm compared with the long-term average of 508mm and North Kimberley LCD with 1364mm (average 787mm).

In the Pilbara, 98% of sites were above average. A small number of sites near Exmouth experienced average seasonal conditions. This contrasts with 2015/16, when 79% of WARMS sites were below average.

Rainfall in the Pilbara is highly variable and the long-term average summer rainfall is about one-third of that received in the Kimberley.

Rainfall in the arid southern shrublands is also highly variable. In 2016, 47% of WARMS sites were above average and 47% of sites were average. Parts of the Gascoyne–Wooramel (41%) and Shark Bay (36%) LCDs received below-average winter rainfall.

Seasonal quality is an estimate of the effectiveness of the rainfall received.

Table A1 Seasonal quality by region for WARMS sites in 2016/17

Region Above average (%)

Average (%)

Below average (%)

Kimberley 100 0 0

Pilbara 98 2 0

Southern 47 47 6

Plant trends

Northern rangelands

The 2016 reassessments of WARMS sites were carried out in the Halls Creek – East Kimberley, Derby – West Kimberley and Roebourne LCDs. The next complete assessment (assessment 8) will be in 2017.

The 2016 data indicate a slight decrease (–3%) in desirable perennial grass frequency in the Halls Creek – East Kimberley LCD to 76%.

The reassessment of the Roebourne LCD WARMS sites was completed in 2016. The data indicate that the frequency of desirable perennial grasses declined by 6% to 64% in the most recent cycle (2013–16). This is slightly above the level when monitoring commenced (61%) in the LCD in 1998.

Southern rangelands

During 2016, the fifth assessment commenced, with only the North Eastern Goldfields LCD having sufficient sites reassessed to provide an indication of trend. The data indicate that the density of desirable shrubs increased by 6% over the 2011–16 period and by 26% since WARMS monitoring began in 1994.

This trend contrasts with that of the Southern rangelands region as a whole. Analysis of data for the last complete assessment cycle (assessment 4) indicates the density of desirable shrubs has decreased by 16% since WARMS monitoring began in 1994.



Cost of rangeland degradationThe published inventory and condition surveys of the pastoral districts indicate that land degradation has reduced carrying capacity by about 27%. Analysis of the data suggests that in aggregate, an average opportunity cost of land degradation is around $145 000 per annum per pastoral business (A Bennett 2015, pers. comm., 3 July). Rangeland degradation has seriously undermined pastoral business viability and will have ongoing impacts unless adequately managed.

Rangeland degradation tends to be episodic in occurrence while recovery is slow where change is not permanent. Mitigation and recovery will require government intervention.

ConclusionsThe monitoring data continue to point to critical areas where land degradation is undermining the sustainability of our agricultural industries:

• Subsoil acidity is widespread and having a very significant economic impact. In aggregate, the level of lime application is below that required to raise soil pH to acceptable levels. Long-term security of access to coastal lime resources remains a high priority for agriculture.

• On-farm nutrient mapping highlights widespread inappropriate fertiliser management on the coastal plain and in the south-west that impacts farm profitability as well as causing significant offsite land degradation (eutrophication).

• Salinity continues to expand in the South West Agricultural Region in catchments where clearing occurred in the past three-to-four decades. The widespread rising ground water trend recently observed is attributed to unseasonal 2017 summer rainfall.

• The risk of wind erosion through loss of ground cover and tillage is a persistent problem of the low rainfall margins of the wheatbelt. Water erosion is insidious and episodic. The frequency of severe unseasonal rainfall events has increased over the past 20 years.

• The Kimberley rangeland condition trend remains stable, while the previously reported decline in desirable grass frequency in the Pilbara has halted in all LCDs, except Ashburton and Lyndon.

• The decline in resource condition of much of the southern shrublands has continued since WARMS monitoring began in 1994. Some of this change may reflect increased summer and declining winter rainfall.

Andrew Watson Commissioner of Soil and Land Conservation



Reference listPeterson, E 2015, Economic analysis of the impacts and management of subsoil constraints, Department of Agriculture and Food, Western Australia, Perth

Schoknecht, N, Bicknell, D, Ruprecht, R, Smith F and Massenbauer A (eds.) 2013, Report card on sustainable natural resource use in agriculture, Department of Agriculture and Food, Western Australia, Perth

Simons, J, George, R and Raper, P 2013, ‘Dryland salinity’, In: Report card on sustainable natural resource use in agriculture, Department of Agriculture and Food, Western Australia, Perth

Weaver, D and Summers, R 2013, ‘Nutrient status (phosphorus)’, In: Report card on sustainable natural resource use in agriculture, Department of Agriculture and Food, Western Australia, Perth

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