Our Vision and Mission   Preface
Executive Summary   Our Program Structure  &  Accountability
Key Elements of 1998-99 Plan   The 1998-99 Budget 
The Sub-programs   Govt Priorities/Community Benefits 
Portfolio Management    Appendices
  
   

Preface

The Annual Operational Plan is one of the Corporation’s central references for our business. The Plan is drawn from our Five Year Strategic Plan and seeks to capture the key R&D priorities for 1998-99. The Plan also spells out the Budget allocations that are being made to drive the Plan.

The 1998-99 Plan has been produced by the Corporation in close consultation with industry. Industry funds a significant element of the Budget and the Corporation can only get the right priorities if we work in partnership with RIRDC related industries. These linkages, set in the context of our broader accountabilities, are summarised on the next page.

This accountability framework seeks to outline the way we do business and the processes by which we account for our performance against the strategies set out in the planning documentation. We work in close consultation with industry in terms of the strategic agenda, with the Corporation managing the day-to-day agenda.

Each year, the Minister approves our Annual Operational Plan before we can put the Budget to work.

The Federal Government has now provided us with this approval and the Plan is now operational for 1 July, 1998 to 30 June, 1999. A copy of the Chair’s transmittal letter to the Government on the Plan is at Appendix 1, page.

This Plan is essential reading for those wanting to ‘get inside’ the diversity and directions of our operations. If you are uncertain about any aspect do not hesitate to contact us. Details are at the ‘Corporate Directory’. Our homepage at http://www.rirdc.gov.au is also a key door into reference to the operations of the Corporation.

 

Peter Core
Managing Director
June, 1998

Executive Summary

Key R&D Investments

The Corporation has four main Programs, each of which have a number of Sub-programs. As we commence 1998-99, the Corporation will be managing more than 500 on-going projects and is planning to put around 150 new projects under contract in 1998-99. For each of our four main Program areas a summary of the new elements for 1998-99 is presented at page 7 of this Plan. All of these initiatives are important to each of the Sub-Programs but, with that caveat, the following are highlighted:

The Revenue Side

The 1998-99 Plan is framed around total Corporation revenue of $22.86m. This is made up of a Commonwealth general appropriation of $10.99m, statutory levy and associated Commonwealth matching revenue of $7.11m, voluntary industry income of $.77m and other income of $3.99m. This ‘other income’ includes revenue from joint ventures, publications, technology agreements and interest on cash balances.

The Commonwealth general appropriation of $10.99m in the Plan is based on what is included in the Federal Budget presented to the Parliament on 12 May 1998. The following RIRDC related programs are supported by revenue from statutory levies-buffalo, chicken meat, deer, eggs, goat fibre, honey, pasture seeds and rice. Details on the breakdown of revenue estimates are presented at Appendix 2 at page *.

There are industry proposals to extend the statutory revenue base of the Corporation to its programs covering horses, wildflowers, fodder and tea- tree. However, the 1998-99 plan is not premised on any revenue from these levy proposals. The revenue sources for these four programs will continue to be voluntary industry contributions and the Commonwealth general appropriation.

The 1998-99 revenue estimate of $22.86m compares with $20.44m in 1997-98. A significant new element in 1998-99 is the $1.0m being received from the National Heritage Trust for project funding in Agroforestry. This is part of a three-year funding allocation of $2.5m.

The Expenditure Side

The proposed expenditure in 1998-99 by the Corporation is $23.66m. This is an increase of $2.43m over 1997-98 and, in large measure, this increase is reflective of the expansion in Agroforestry funding. In aggregate terms, the key expenditure areas are as follows:

Research and Development $m As % of Total Expenditure
Prospective New Industries 2.21 9
Emerging New Industries 6.14 26
Established Industries 8.09 34
Future Farming Systems 3.33 14
Program Development .41 2
Research Co-ordination and Management 1.59 7
Functional Support Areas
Corporate .50 2
Communication .50 2
Administration .89 4
   

Under the legislation, levy revenue and its matching contribution must be targeted on those levy paying industries. Similarly, the Corporation receives funds which are attached to specific programs. In accounting terms, nearly all of these funds are held within separate industry accounts of the Corporation. In fact, the Corporation is establishing two new sub-accounts for Tea Tree Oil and Agroforestry because of the extent to which these programs are now being supported by external income.

Nearly all of the proposed expenditure for 1998-99 is being allocated by this Plan to the specific sub-programs of the Corporation. The list of new projects we are proposing to fund in 1998-99 under each of our sub-programs is at Appendix 3 at page.

The budget has put aside just over $400,000 in program development funds which have not yet been allocated to specific sub-programs. At this stage, the intention is to allocate the bulk of these funds to the ‘Australian Rural Woman of the Year’ Awards and to a ‘Northern Australian Agribusiness Allowance’. The Corporation will report separately on these two initiatives to the Minister when the proposals are developed further.

 

Program Evaluation

In this Plan, the Corporation will continue to fund a rolling program on ex-post project evaluations. Details are set out at page *. In essence projects from Program 2 ‘Emerging New Industries" were selected in 1997-98 and, in 1998-99, a similar exercise will be carried out for Program 3 ‘Established Industries’.

The results of our work on Program 2 were only obtained in late May 1998, too late to shape aggregate resource allocations for this Plan. However, there are important lessons emanating from the ex-post evaluations which will be followed up by the relevant Research Managers and Advisory Committees.

Examples of the planned follow-up include the following:

The Corporation’s Financial Position

On an accrued basis, the reserves held by the Corporation are estimated/forecasted at end June 1998 and end June 1999 as follows:

RIRDC Core $ 
Sub-Accounts $ 
Consolidated $ 
Estimated End June 1998 (1,248,818) 5,058,246 3,809,428
Forecasted End June 1999 (1,248,818) 4,249,687 3,000,869
 
    These figures are accrued.
On a cash basis, the counterpart figures are as follows:
RIRDC Core $ 
Sub-Accounts $ 
Consolidated $ 
Estimated End June 1998 15,242 3,696,310 3,711,552
Forecasted End June 1999 521,242 2,987,751 3,508,993
   

In the view of the Board, the reserves set out in the above tables are sufficient for 1998-99 operations given the risk profile of the Corporation. In making this judgement, Directors are aware that industry funded reserves cannot be used to underpin the financial viability of the non levy based accounts.

When a comparison of the RIRDC Core estimated cash holdings at 30 June, 1998 is made with that forecast in the 1997-98 Annual Operating Plan ($1.8m), the discrepancy predominantly arises due to the unanticipated strength of R&D program cash outflows in the last two months of 1996-97.

It should also be noted that the 1998-99 Budget provides for eliminations on consolidation in relation to inter-entity transactions within the Corporation. These eliminations relate to program management service fees applied by RIRDC Core to associated Sub-Accounts (on a cost recovery basis) and RIRDC Core contributions to the R&D programs of the Horse, Agroforestry and Tea Tree Oil Sub-Accounts.

In respect of the Commonwealth general appropriation, the Corporation is obliged to comply with liability discharge limits in the out years 1999-00 to 2002-03. These limits are determined in consultation with the Department of Finance and Administration as part of the Commonwealth Liabilities Control System. Contractual obligations implicit in this Plan will be managed in a manner consistent with approved liability discharge limits.

RIRDC Linkages to Research and Development Councils

Where a Research and Development Council exists and there is currently only one – Dried Fruits (DFRDC) – the Corporation provides clerical and administrative services as required by the legislation and input into their key accountability documents, including their Annual Operational Plan. These inputs have been provided and a summary of the financial allocations by the Council for 1998-99 is at Table 4 on page. The Corporation’s Budget at Tables 1-3 does not include these DFRDC allocations.

Consultations with Industry

Prior to finalising the Plan, the Corporation consulted with the following industry organisations. In the case of the NFF, it was on the totality of the Plan and, in the case of the others, on those as those parts of the Plan that related directly to them.

Notification of Significant Events

The Corporation has reviewed this Plan in terms of S.15 of the Commonwealth Authorities and Companies Act 1997 which defines a particular class of proposal as ‘significant’ and notifiable to Ministers. The Corporation confirms, in the context of S.15, that there are no ‘significant’ proposals in this Plan which should be drawn to the attention of Ministers.