Senate Education and Employment Legislation Committee, , 33:26 to 36:39
Examination of the $6.4 million impairment related to vacated leased buildings in Canberra as part of a broader strategy to consolidate the department's property footprint.
Topics: Procurement, Government spending
Speakers: Senator Paul Scarr, Erin Cockram, Ben Sladic, Catherine Rule
Okay. If you could uh as I understand it there was $6.4 million of uh asset value in relation to leased buildings which was written down what does that relate to?
Under the accounting standards we're required to recognise a right of use asset when we enter into a lease for a building so it's a basically recognising that when you enter the lease it you recognise an asset for the use of that building and you recognise a liability to sort of pay off the remainder of the lease we had two properties here in Canberra which we've vacated as part of our broader consolidation before the end of the financial year but because they're the leases don't actually end until part way through the current financial year we were required under the accounting standards to recognise an impairment of that right of use asset.
So how's that amount calculated? Is that rent which is going to be thrown away because you're not in occupation of the buildings?
The right of use asset there's a calculation under the accounting standard which basically takes into account sort of present value of the rent payments. So it's rent it's it's not as simple as that there's a quite there's a complex accounting center.
But that's part of the that's part of the calculation at least in terms of what rent you would have been paying to occupy to give you the right to occupy those those premises
where were the premises which premises I think they're in Mort Street Senator but if we could street in Civic Mort, M O I T, yep.
And the department's no longer occupying those spaces?
Not since the end of June no.
Okay. How long how much longer is there on the leases like is it six months? Is it two years?
It's this financial year just this financial year. Yeah current financial year 26-27 and it expires within this financial year I think it might be towards the end of the financial year but I'll confirm that for you.
Okay. A steps being taken to mitigate the loss in terms of if other tenants can be found is there any process in that regard?
Certainly we um I think we looked at at examining what options there might be there through our property branch and property services providers but I don't think given it was only a year and the general nature of the market um there was anything really coming out of those initial considerations.
Senator this is part of a broader strategy to consolidate our property footprint which we estimate will deliver us annual savings of around eight to nine million dollars a year across the country as we need a smaller footprint.
So Senator Scarr should be seeing the glasses half full not half empty employee costs if I can move on to that what were the employee costs for the year