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Metropolitan Fire and Emergency Services Board

ANNUAL REPORT 2013–14

MFB ANNUAL REPORT
2013–14
OUR VISION
A safer and
more resilient
community.

OUR MISSION
Protection of life,
property and the
environment.

OUR GOALS
• Engage our people
• Build a safer community
• Achieve organisational excellence

LETTER TO THE MINISTER

The Hon. Kim Wells MP
Minister for Police and Emergency Services
Level 16, 121 Exhibition Street
Melbourne VIC 3000

Dear Minister,
I have much pleasure in submitting the 2013–14
Annual Report of the Metropolitan Fire and Emergency
Services Board in accordance with the Financial
Management Act 1994 (Vic).
Yours sincerely

Neil Comrie AO, APM
President
Date: 1 September 2014

CONTENTS
2
3
4
5
6
10
12
13
14
17
19
22
24
29
32
39

Vision, mission and goals
Letter to the Minister			
President’s foreword				
Chief Executive Officer’s report				
About us 				
The Board 			
Executive leadership team
Organisational structure
Our performance			
A challenging fire season
MFB in the community
MFB partners			
MFB people 			
Innovation and efficiency
Corporate governance statement
Financial report

Front and back covers: hot fire training at the VEMTC.
Inside cover: Aerial view of VEMTC.
MFB MFB
Business
Annual
Plan
Report
2014–15
2013–14

1

3

PRESIDENT’S
FOREWORD
In years to come when we look back on
the summer of 2013–14 we may well
view it as the turning point where the
philosophy of an all hazards all agency
approach to emergency management
in Victoria started to take hold.

Neil Comrie AO, APM
President

THE NEW FIRE
SERVICES LEVY
HAS FOR THE
FIRST TIME MADE
MFB DIRECTLY
ACCOUNTABLE TO
THE PUBLIC FOR
THE SERVICES WE
DELIVER AND THE
WAY THESE ARE
RESOURCED.

This year further galvanised MFB and
confirmed the challenges it faces. It also
reinforced the need to continue to reform the
organisation as major changes occurred.The
new Fire Services Levy has for the first time
made MFB directly accountable to the public
for the services we deliver and the way these
are resourced. This is a positive change for the
sector and the community and will help drive
reforms and efficiencies in MFB.
MFB has continued to deliver world class
response times and first responder actions.
MFB is determined to maintain this level
of service delivery, while also increasing its
support outside the metropolitan district.
I am proud of MFB’s achievements over
the summer fire season, but at the same
time I know MFB must become a more agile
and flexible organisation to deal with the
changing needs of emergency management
in Victoria. Change can be difficult, but it
will ensure that the organisation reaches its
full potential, ultimately making the Victorian
community safer.
To that end MFB is examining many areas of
its operations. This includes how we deploy
people and appliances, and lateral entry of
experienced and qualified staff from other
emergency services into the organisation.
Flexible working arrangements and fit for
work standards are being pursued through
negotiations for new enterprise agreements.
MFB’s levels of unplanned leave continue
to be of concern. The Strategy Planning
and Resources Committee of the Board is
monitoring the implementation of a plan to
address this issue.

MFB is also facing the challenges associated
with an ageing workforce and managing the
change required to create the next generation
of leaders. The Victorian Emergency
Management Training Centre at Craigieburn
is now complete and it is an exciting
development. The centre is a state-of-the-art
facility which supports sector aims to provide
high-quality training to enhance the safety of
our people and the wider community.
MFB will be operating this facility on behalf
of the State. The facility will provide training
not only for MFB firefighters, but also for
thousands of emergency service personnel
from the CFA, Victoria Police, Ambulance
Victoria, Department of Environment and
Primary Industries and the State Emergency
Service. It will quickly become a showpiece
for specialist skills development and the
proving ground for many of the State’s future
emergency management leaders.
I would like to take this opportunity to welcome
MFB’s new Chief Executive Officer, Jim
Higgins, who brings a wealth of experience in
emergency management to the role. I would
also like to thank Nick Easy, MFB’s previous
Chief Executive Officer. Nick made a significant
contribution to the organisation during a time
of major change and transition.
This year we also farewelled Alf Long who
left the Board after three years of service.
I thank Alf for his strong input to the
governance of the organisation. In addition,
the Board welcomed two new members:
Stuart Alford and Therese Ryan.
Although MFB faces many challenges,
the changes being implemented and our
work to date with our partners to improve
interoperability stand the organisation in good
stead. MFB is on track to deliver even more
effective emergency management services to
the Victorian community in the future.

Neil Comrie AO, APM
President

4

MFB Annual Report 2013–14

CHIEF EXECUTIVE
OFFICER’S
REPORT
While new to MFB, I am impressed
with the passion and determination of
MFB’s people. Their performance during
a challenging summer fire season is
commendable, particularly as it was
achieved without a reduction in the
quality of services provided within the
metropolitan district.
MFB maintained a strong leadership role this
year during emergencies, especially in our
growing work with the State Control Centre
and incident and regional control centres.
Once again the organisation delivered more
services in regional Victoria, in particular in
Morwell and interstate in New South Wales.
Our participation in major incidents outside
Melbourne reinforce the importance of the
emergency services reform agenda and MFB’s
commitment to evolve to meet those changes.
Under the sector’s three-year Reform Action
Plan both the types of services and the
way they are delivered by MFB is changing
dramatically. This includes providing statewide coverage in areas such as hazardous
materials. In addition, Emergency Management
Victoria’s goals and strategic themes require
MFB to meet new service delivery standards.
This will be challenging for MFB and our
partners, but ultimately it will ensure enhanced
and borderless emergency management.
The organisation is increasingly seeking
innovative and collaborative solutions to
emergency management. MFB delivers
specialist urban firefighting, emergency
response and rescue services and emergency
medical response. Notwithstanding the
significant demands generated by a very
busy fire season, MFB performed very well in
terms of response times and fire containment
in 2013–14. This is particularly impressive
given the large program of change currently
being undertaken by the organisation and the
extreme fire conditions over the summer.
In order to fulfil its vision, MFB works to build
the community’s capacity to respond to fires
and recover after fires occur. This involves
engagement and prevention activities. MFB
also works closely with communities that
are particularly vulnerable. MFB is becoming
more sophisticated about the design
and implementation of its prevention and
engagement activities, drawing on research
and striving to innovate.
This year MFB delivered the Victorian
Emergency Management Training Centre at
Craigieburn in partnership with Major Projects
Victoria, on time and to budget. This worldclass facility was officially opened in June
by the Victorian Premier Dr Denis Napthine,
alongside Minister for Police and Emergency
Services and Minister for Bushfire Response

Kim Wells and Minister for Major Projects
David Hodgett.
This $109 million training facility will give
emergency services personnel access to
highly-specialised fire and emergency training
facilities, enhancing the sector’s ability to
support a state-wide shift towards to an
‘all hazards, all agencies’ approach to
emergency management.
The 12 training props on site which simulate a
range of real life situations, including major fires,
road accidents, petrochemical fires, ship board
incidents and urban search and rescue. These
realistic scenarios are tailored to Melbourne’s
unique urban landscape, and include lane ways,
rail tunnels and tram stops with fire, smoke,
sound and physical obstacles.

Jim Higgins ASM
Chief Executive Officer

They will be an invaluable tool in building
Victoria’s emergency service capacity to
respond to fire, hazmat and rescue incidents.
Behind the scenes, MFB has begun major
work on information and communication
systems to improve our capacity and to
support interoperability with other emergency
management organisations. MFB’s Information
Management Strategic Plan is guiding
investment in information technology.
In order to support change, MFB embarked
on a major program of organisational and
leadership development. Based on employee
feedback we have established frameworks
and processes to create people centered
management of change. Negotiations for new
operational enterprise agreements continue
with MFB focused on achieving a modern
enterprise award agreement that will unlock
the organisation’s potential and continue to
provide competitive pay and conditions for
our valued employees.
As we progress this cultural change and
release our potential, safety will remain the
organisation’s number one priority. We will
continue to develop and improve safety
measures to identify and manage risks. We
will ensure that as we respond effectively to the
challenges of emergency management reform,
no compromises are made to staff safety or
that of the people we serve and protect.

WE WILL CONTINUE
TO DEVELOP AND
IMPROVE SAFETY
MEASURES TO
IDENTIFY AND
MANAGE RISKS.
WE WILL
ENSURE THAT
AS WE RESPOND
EFFECTIVELY TO
THE CHALLENGES
OF EMERGENCY
MANAGEMENT
REFORM NO
COMPROMISES ARE
MADE TO STAFF
SAFETY OR THAT
OF THE PEOPLE WE
SERVE AND PROTECT.

I would like to thank all our employees for
their work throughout the year. It has been an
honour to be appointed the Chief Executive
Officer of MFB. We have much more work to
do and our Board, our employees, and our
partners have the knowhow and commitment
to achieve our goals so we can better serve
the Victorian community.

Jim Higgins ASM
Chief Executive Officer
MFB Annual Report 2013–14

5

ABOUT US

MFB’S 2,197
EMPLOYEES HELP
SAFEGUARD ALMOST
FOUR MILLION
MELBOURNE
RESIDENTS,
WORKERS AND
VISITORS ALONG
WITH ASSETS AND
INFRASTRUCTURE
WORTH BILLIONS
OF DOLLARS.

MFB strike teams working with
CFA and DEPI in the Stawell and
Halls Gap area.

6

MFB Annual Report 2013–14

WHAT WE DO

OUR VALUES

MFB’s 2,197 employees help safeguard almost
four million Melbourne residents, workers and
visitors along with assets and infrastructure
worth billions of dollars. Our day-to-day service
covers the metropolitan district, an area of over
1,000 square kilometres. However, our fleet
and personnel can be called on to support
emergency management anywhere in Victoria.

MFB aims for continuing, measurable
improvement in our workplace culture. MFB:

MFB delivers fire and emergency
management services, and drives systemic
change to the built environment through
reforms to building design, regulations and
legislation. MFB also invests in research and
develops prevention programs that improve
community safety and build resilience. In
addition, specialist operational support is
provided across Australia and the Asia Pacific
region as required.

•

works in a highly professional manner

•

strives for a workplace culture of safety;
identifying and remedying the causes of
workplace injuries

•

is responsive to the needs of our people
and our community

•

demonstrates initiative, innovation and
agility as we continuously improve our
services.

MFB upholds the Victorian Government Public
Sector Values:
•
•
•
•
•
•
•

responsiveness
respect
integrity
leadership
impartiality
human rights
accountability.

ABOUT US continued

OUR WORK
Response

MFB’s work covers prevention, preparedness,
response and recovery.

When MFB is dispatched to incidents we work
to minimise their impact and provide affected
individuals and communities with immediate
relief and support. We respond to around
36,500 calls a year covering fires, hazardous
incidents, automatic alarms, road accidents,
medical emergencies, urban search and
rescue and marine incidents. See Figures 1
and 2.

Prevention
MFB aims to eliminate or reduce the incidence
or severity of emergencies. We work with the
community, partner emergency management
agencies, government agencies, peak
bodies and the private sector to create the
knowledge, behaviours, and regulatory
frameworks that will protect life, and minimise
injury and damage to assets.

Recovery
MFB supports emergency-affected individuals
and communities and aims to restore
emotional, social, economic and physical
wellbeing. We work with our partners to
ensure that the community and its resources
are protected and maintained following an
incident.

Preparedness
MFB works to ensure that individuals and
communities are able to prevent and respond
effectively to emergencies. This includes:
putting response plans and arrangements
in place, conducting assessments of the
likelihood and severity of risks, planning for
the continued availability of essential services,
and identifying ways to mitigate the potential
impacts of an emergency.

36671

35140

34447

33489

35706

35673

36364

33081

25000

31161

30000

31591

35000

36059

40000

Figure 1: Number of
MFB calls attended
2003–04 to 2013–14
Number of calls
Trend line

20000
15000

AIRS data was affected by industrial
bans Sep 05, Jan–Mar 06, Oct 02 (this does
not affect the total number of incidents reported
but disaggregation is not possible)

10000
5000
0

2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10 2010/11

2011/12 2012/13 2013/14

16000

Figure 2: Breakdown of calls
attended by type of incident
(metropolitan district)

14502
14622
14659

14000
12000

2003–04 to 2013–14

10000

0
Fires and
explosions

Hazardous
conditions
(not a fire)

Emergency
medical
response

Rescues and
other medical
assistance

126
136
137

2000

1320
1211
1360

3300
3366
3391

4000

2820
3327
3482

2013–14

2564
4008
4803

6000

2012–13

8835
8142
7382

8000

Average 2003–04 to 2012–13

Service
calls

False alarms
and false calls
(incl. good intent)

Other
situations

MFB Annual Report 2013–14

7

ABOUT US continued

WHERE WE WORK
MFB delivers most of its services in the metropolitan district – a two-region, five-district area –
and operates 47 stations across 26 local government areas. Our structural arrangements are
aligned to state government regional boundaries. This enables us to work cohesively with local,
regional and state partners, planning, controlling and coordinating responses to incidents under
the state emergency management arrangements. It is also the platform for integrated emergency
management planning at the local, municipal, regional and state level.
Our regional model supports MFB’s role in the State Control Centre, with regional controllers
from all agencies working together on emergencies in their areas of responsibility.

The metropolitan district and
the MFB regional and district
structure
•

Somerton
(FS9)

•

(FS48)

St Albans
• (FS41)

• Keilor

(FS51)

•

Deer Park
(FS43)

NORTH
WEST
METRO
Ascot Vale
(FS50)

•

Sunshine
•
(FS44)

Western
District
•

North Laverton
(FS49)

Footscray •
(FS47)
Spotswood
(FS45)

•

Altona
•
(FS46)

• Thomastown
(FS7)

Newport
(FS42)

Greensborough
•
(FS16)

Northern
District

Pascoe Vale
• (FS6)

Preston
• (FS12)
Brunswick
•
(FS4)

• Bundoora
(FS14)

Heidelberg
(FS15)•

Templestowe •
(FS30)

• Northcote
(FS13)

Central
District

Carlton (FS3)
•
West Melbourne
•
(FS2) • Eastern
•
Hill
Richmond
South Melbourne
(FS1)
(FS10)
(FS38)•
Port Melbourne
• (FS39)

•

• Laverton
(FS40)

Broadmeadows
• (FS5)

Tullamarine
(FS52)

• Taylors Lakes

Epping
• (FS11)

•

Windsor
(FS35)

North Balwyn
•
(FS19)

Box Hill
• (FS20)

Hawthorn
• (FS18)

SOUTH
EAST
METRO

• Burwood
(FS23)

Oakleigh
• (FS25)

Southern
District

•

• Highett
(FS34)

Clayton
(FS29)

Mentone
• (FS33)

8

MFB Annual Report 2013–14

Vermont South
(FS28)

Eastern
District

• Malvern
(FS24)
Ormond
• (FS32)

• Nunawading
(FS27)

•

• Glen Waverley
(FS31)

• Ringwood
(FS22)

• Croydon
(FS26)

ABOUT US continued
6500
6000
5500
5000
4500
4000
3500
3000
2500

Figure 3: Number of calls by
LGA (MFB and CFA areas)

2000

2003–04 to 2013–14

1500

Average 2003–04 to 2012–13
2012–13

1000

2013–14

500

Note: This chart shows all calls attended
by MFB. LGAs crossing the metropolitan
district boundary are denoted by a star (*).

Central

Southern

Western

*Other areas

*Melton

*Wyndham

Maribyrnong

Moonee Valley

Brimbank

Hobsons Bay

*Kingston

Glen Eira

Stonnington

Bayside

*Nillumbik

Port Phillip

*Hume

Northern

*Whittlesea

*Banyule

Darebin

Moreland

*Manningham

*Yarra Ranges

*Knox

Eastern

*Maroondah

*Greater Dandenong

Monash

Whitehorse

Boroondara

Yarra

Melbourne

0

CFA

MFB crews on board Fireboat 1
on Port Phillip Bay.

6500.0
5687.5

MFB Annual Report 2013–14

9

THE BOARD
Neil Comrie AO, APM
President
Appointed President June 2010

John Lord AM
Board Member
Appointed July 2011

Neil brings to MFB significant emergency
management experience. A career police
officer, Neil joined Victoria Police in 1967
and, after serving initially in uniformed and
specialist roles, in 1990 he was appointed
Assistant Commissioner, Queensland Police
Service. In 1993, Neil was appointed as the
eighteenth Chief Commissioner of Victoria
Police. He retired in 2001. Neil is currently the
Independent Monitor for the implementation
of the recommendations of the Victorian
Bushfires Royal Commission and he was also
appointed as Chair, Review of the 2010–2011
Flood Warning and Response – Victorian
Floods Review. He has undertaken various
sensitive and significant inquiries and projects
on behalf of the Commonwealth and Victorian
Governments, and internationally.

John has had high profile careers in the Royal
Australian Navy, the Commonwealth and
state public sectors, and private enterprise.
In recent years he has provided strategic
planning advice and corporate governance
to the commercial sector, specialising in
international relations, government business,
and the maritime industries. He served with
the Royal Australian Navy for over 36 years
and retired with the rank of Rear Admiral. He
is a former Chief Executive and director of the
Marine Board of Victoria where he initiated
several state and national maritime programs.
He was also a member of the Australian
Maritime Group and the National Plan
Committee for maritime emergency responses
around Australia. John is presently Chairman
of Huawei Technologies Australia and the
Victorian Veterans Council. He is also member
of the Defence Council Victoria, the Ministerial
Advisory Committee for Corrections, and a
Director of the Defence Bank Foundation Trust.

Ken King
Deputy President
Appointed July 2008,
appointed Deputy President July 2011
Ken served as a member of the Country Fire
Authority Board from 2003 to 2012, and
retired recently from a long and very successful
career in the Department of Sustainability
and Environment (DSE). Ken has held senior
positions in land management, forestry and
bushfire management, including as the DSE’s
Regional Manager for northwest Victoria,
South Gippsland and the Port Phillip area
which covers metropolitan Melbourne. Ken
serves on the boards of the Natural Resources
Conservation League, the Bjarne K Dahl Trust
and the Habitat Melbourne Trust.
Jay Bonnington
Board Member
Appointed July 2006
Jay is a chartered accountant and has
worked overseas, with the Transfield Group
in Australia, and as CFO/Finance Director of
Yallourn Energy Ltd, and NEMMCO. She then
moved into financial services and became
CEO of a not for profit. She now serves
as a professional non-executive company
director on a number of boards, including
St. John of God Healthcare Group, HESTA
Superannuation and Utilities Trust of Australia.
In addition, she serves on several community
boards, including Deakin University Council,
the Lord Mayor’s Charitable Foundation, and
the Audit Committee of the Salvation Army’s
Southern Territory.

10 MFB Annual Report 2013–14

Stuart Alford
Board Member
Appointed September 2013
Stuart joins MFB following a distinguished
career as a chartered accountant having
worked for international accounting firm
Ernst and Young for 40 years, including 27
years as a partner. He is currently Chair of
the Centre of Excellence for Intervention and
Prevention Science Limited, a board member
of Eastern Health; Eastern Health Foundation,
and Kilvington Grammar. Stuart is also an
Audit Committee Member of the Victorian
Curriculum and Assessment Authority; Chair
of the Audit Committee, Australian Accounting
Standards Board, and Chair of the Audit
Committee, Auditing and Assurance Standards
Board. Stuart is a fellow of the Institute of
Chartered Accountants in Australia and a
member of the Australian Institute of Company
Directors.

THE BOARD continued
Therese Ryan
Board Member
Appointed August 2013
Therese is an experienced professional and
non-executive director, who has worked
across a diverse range of industries. She is
a non-executive director of Burson Group
Limited, Victorian Managed Insurance
Authority, VicForests and Yarra Valley Water.
She is also an independent member of the
audit committee of the City of Melbourne and
Chair of the Advisory Committee for the Office
of Correctional Services Review. Until recently,
she was also Chair of Good Shepherd Youth
and Family Services and Fitted for Work and
a non-executive director of Good Shepherd
Microfinance. In her last senior executive role
in General Motors, Therese, was a member of
the senior leadership team for its international
operations, as well as General Counsel. She
lived and worked in China for four years,
leading a team delivering projects not only in
China but across the globe, including India,
Korea, Latin America, Africa, the Middle East
and Eastern Europe.

Alfred Long
Board Member (retired from the Board
on 13 September 2013)
Appointed 14 September 2010
Throughout an impressive 44-year career
with the Commonwealth Bank of Australia, Alf
worked in four states. Following a cadetship
in his early years he worked in branch
management then undertook positions in
the corporate banking arena where he was
later appointed General Manager. He was
appointed State Manager, Queensland and
four years later returned to Victoria as General
Manager to implement the merger of CBA and
The State Bank of Victoria. In 1997 he became
head of the Customer Service Division,
managing the CBA’s extensive distribution
network and its 28,000 employees across
Australia. Alf retired from the CBA in July
2000. His capacity to draw people together
and to resolve complex organisational issues
complements the skills on the MFB Board.

David Purchase OAM
Board Member
Appointed July 2011
After graduating with a law degree from
Melbourne University, David spent 15 years
at the Victorian Employers Federation, and
was appointed Deputy Executive Director. In
1986 David was appointed Executive Director
of the Life Insurance Federation of Australia,
the representative body for life insurance
companies. In 1994 he joined Norwich
Union Financial Services Limited as Group
Company Secretary and in 1995 became
General Manager of Lifescreen Australia Pty
Ltd (a subsidiary company of the Norwich
Group). David joined the Victorian Automobile
Chamber of Commerce (VACC) as Executive
Director in 1997. He also sits on the boards
of MotorTradeCard Pty Ltd, Motor Industry
Holdings Limited, Motor Industry House Pty
Limited, and is a panel member of the Winston
Churchill Memorial Trust Committee.

MFB Annual Report 2013–14 11

EXECUTIVE
LEADERSIP TEAM
MFB comprises seven directorates and an
office supporting the CEO. The Executive
Director Emergency Management is
usually also Chief Officer. However, the
roles were managed by two Deputy Chief
Officers from December 2013 to May
2013 while MFB sought to appoint a
new Chief Officer.

Executive Director People and Culture
Danielle Byrnes

Chief Executive Officer
Jim Higgins ASM commenced as CEO
on 28 April 2014. He joins MFB from the
Victorian Department of Human Services
and was previously the Commissioner of the
Queensland Ambulance Service, where he
worked for 13 years.

Executive Director Organisational
Learning and Development
Acting Deputy Chief Fire Officer David Bruce

Chief Officer
Peter Rau was appointed Acting Chief Officer
in December 2013 and was formally appointed
to the role on 29 May 2014. He has over
30 years’ experience in fire and emergency
management with the CFA and MFB.
Executive Director Emergency
Management
Assistant Chief Fire Officer Adam Dalrymple
(Acting)

MFB appliances and the Erickson
Air Crane in Stawell.

12 MFB Annual Report 2013–14

Executive Director Corporate Services
Russell Eddington
Executive Director Property and Assets
Craig Lloyd
Executive Director Strategy and
Innovation
Neil Hubbard (Acting)

Regional Director North West Metro
Region
Deputy Chief Officer David Youssef
Regional Director South East Metro
Region
Acting Deputy Chief Officer Andrew Zammit
Lead Executive Operations Enterprise
Agreement
Deputy Chief Officer Paul Stacchino

ORGANISATIONAL
STRUCTURE
BOARD

EA Project

Office of
the CEO/
Corporate
Governance

CEO

O P E R AT I O N S

SUPPORT SERVICES

Emergency
Management
(Chief Officer)

North West
Metro Region

South East
Metro Region

Property
and Assets

People
and Culture

Office of the
Chief Officer

Regional
Operations

Regional
Operations

Property
Services

Community
Resilience

Community
Resilience

Community
Resilience

Fleet

Health and
Safety

Health and
Safety

Health and
Safety

Capability
Improvement

Learning and
Development

Fire Safety

Infrastructure
and Regional
Projects

Regional
Fire Safety

Corporate
Services

Strategy and
Innovation

Organisational
Learning and
Development

Human
Resources

Finance

Corporate
Strategy and
Performance

Victorian
Emergency
Management
Training Centre

Workplace
Relations

Records
Management

Corporate
Relations

Operational
Training
Development
and Delivery

Mechanical
Services

Business
Assurance

Corporate
Sustainability

Special
Operations

Learning and
Development

Operational
Equipment

Fire
Equipment
Services

Infrastructure
and Regional
Projects

Project
Management
Office

Procurement

Information and
Communication
Services

MFB Annual Report 2013–14 13

OUR
PERFORMANCE
The Victorian Government Budget Papers
set targets for emergency management
organisations and MFB is committed
to the achievement of these goals. This
forms part of the Department of Justice’s
contribution to the fire and emergency
services output group. Table 1 shows
MFB’s performance against measures in
Budget Paper 3. It should be noted that
the counting rules for statewide measures
differ from those used to report internally
by MFB.
Table 1: Emergency
management capability
Budget Paper 3 performance
measures are statewide measures
and are targets that combine CFA
and MFB in relation to fire-related
KPIs or CFA, MFB and SES in
relation to road rescue.

Major outputs and deliverables
Performance measures

MFB sets additional performance measures
to those outlined in Budget Paper 3 in
our Strategic and Business Plan 2011–14
(see Table 2). The measures provide MFB
metrics for areas of emergency response
and corporate performance not included
in Budget Paper 3. These metrics reflect
other areas where continuous improvement
principles apply. Work was undertaken in the
last financial year to review MFB’s metrics
and a new set of KPIs have been developed
that align to new sector goals. These will be
implemented in the 2014–2015 financial year.

Unit of
measure

2013–14
State
target

2013–14
MFB
target

2013–14
MFB
actual

Quantity
Permanent operational staff

number

2,732

1,845

1,859

Permanent support staff

number

1,430

356

338

Road crash rescue accredited brigades/units

number

130

5

5

Level 3 incident controller trained staff and
volunteers

number

129

76

82

All structural fires contained to room or object
of origin

per cent

80

90

91

Emergency response times meeting
benchmarks (All structural fires)
– Budget Paper 3

per cent

90

90

89

Emergency response times meeting
benchmarks (Road accident rescues)
– Budget Paper 3

per cent

90

90

89

Emergency response times meeting
benchmarks (Emergency medical response)
– Budget Paper 3

per cent

90

90

95

Quality

Timeliness

14 MFB Annual Report 2013–14

OUR
PERFORMANCE continued
Major outputs/deliverables
Performance measures
KPI 1

Unit of
measure

Structure fires contained to room of
origin (BP3 definition)

per cent

2013–14
target
Both building
and structure
fires 90

2013–14
outcome

2012–13
outcome

86.5
(building)

86.9
(building)

90.5
(structure)

KPI 2

Emergency response times –
structure fires (90th percentile)

minutes

7.7

7.8

7.6

KPI 3

Emergency response times –
road accident rescue response
(90th percentile) *

minutes

13

14.4

13.4

KPI 4

Emergency response times –
emergency medical response
(90th percentile)

minutes

9.2

8.3

8.2

KPI 5

Reduce the number of structure fires
per year by 5 per cent

number

<3,000

2,951

3,183

KPI 6

Minimise residential structure fires per
year with no smoke alarm present

per cent

<12

13.6

12.9

KPI 7

Active level 1 projects classified
as ‘on track’ as at 30 June 2014

per cent

90

74

47

KPI 8

Calls for assistance (000) #

per cent

100%
requests met

100%

100%

36,671 calls

36,059 calls

KPI 9

Preventable fire fatalities

number

0

5

4

KPI 10

On-shift staff availability ^

per cent

95

87.2

87.4

Table 2: MFB performance
measures
* This is the 90th percentile
response time of rescue
vehicles. It excludes normal
road conditions and calls
outside the metropolitan
district.
#
CFA calls – services provided
by MFB into CFA areas as part
of our mutual aid agreement.
^
Percentage of rostered staff
actually available for duty
regardless of the reason
for absence (01/07/13 to
16/05/14).

100%

90.5
86.5

90.8
86.9

90.6
86.7

91.2
87.5

90.6
86.9

90.9
88.7

88.9
86.2

89.3

86.6

90.7
88.2

90.0
87.7

90.1

80%

87.9

Target 90%

Figure 4: Containment of structure
fires to the room of origin
2003–04 to 2013–14

60%

Contained to room of origin
– all building fires1
Contained to room of origin –
excluding fires in buildings confined
to non-combustible containers2

40%
1.

20%

2.

MFB performance measure; target is
90 per cent.
Budget Paper 3 performance measure
determined by Government; target is
80 per cent.

0
2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

MFB Annual Report 2013–14 15

100%

87.9

88.4

88.1

87.3

84.1

83.8

85.4

85.3

86.4

80%

87.4

Target 90%

89.7

OUR
PERFORMANCE continued

60%

Figure 5: Emergency response
times meeting benchmarks

40%

2003–04 to 2013–14

20%

Internal response time benchmarks apply to a
broader range of responses (all emergency calls)
than the Budget Paper 3 benchmarks.

0
2003/04 2004/05

2005/06 2006/07

2007/08 2008/09

MFB SERVICE DELIVERY
In the 2013–14 year MFB attended
36,671 calls in the metropolitan district
and a number of major bushfire and
grassfire incidents outside the district.
There were five preventable fire-related deaths
in 2013–14, compared with four in 2012–13
and the 10-year average of 6.1 preventable
fatalities per year (see Figure 6).
The emergency medical response (EMR)
program responded to more than 4,803
medical calls and provided medical assistance
3,400 rescues and other medical incidents in
2013–14.

2009/10

2010/11

2011/12 2012/13

2013/14

MFB has now performed 163 services with
defibrillators. MFB EMR is now included in
the State Health Response Plan and MFB’s
summer surge capacity helped Ambulance
Victoria during the heatwave.
A number of incidents required a large initial
MFB response and a prolonged allocation
of resources, including clean-up and site
monitoring. Figure 7 highlights the type and
number of major incidents classed as third
alarm and above or equivalent. A first alarm
incident normally involves two appliances; a
fifth alarm involves specialist appliances and
senior command.

12

11

80
60
40

4

5

5

4

6

6

3

3

2

9

8

4

* Preventable fire fatalities are defined
as all fatalities, e
 xcluding murder,
suicides and where the fire w
 as
not the cause of death.

100

7

2003–04 to 2013–14

10

7

Figure 6: Preventable fire
related fatalities

20

0
2003/04

2004/05 2005/06

2006/07

2007/08

2008/09

2009/10

2010/11

2011/12

2012/13

2013/14

35
30
25

31

Figure 7: Types of major
incidents third alarm and
above in the metropolitan
district 2013–14

20
15

13

10

4

9

5
0

16 MFB Annual Report 2013–14

Structure fire

Non-structure fire

Incidents

Hazardous material

A CHALLENGING
FIRE SEASON
The 2013–14 summer tested Victoria’s
emergency management arrangements.
Agencies responded to multiple
incidents statewide as well as interstate.
Contributing resources, such as
command staff, firefighters, administrative
staff, appliances and equipment, MFB
proved to be a borderless organisation.
The summer also highlighted that despite
differing capabilities and doctrines,
we integrated seamlessly with sector
colleagues from around Australia.

NEW SOUTH WALES
DEPLOYMENTS
MFB sent its largest deployment in recent
times to NSW to backfill stations in
metropolitan Sydney, easing the pressure
on crews battling the Blue Mountains
blaze. Ten pumpers crewed with 40 staff,
mechanics and command staff left for
Sydney in October 2013.
While other Victorian agencies sent crews
to the bushfires, MFB’s appliances were
stationed throughout Sydney. This allowed
deployments of crews made up of two MFB
and two Fire and Rescue NSW firefighters.
The crews undertook station briefings,
interagency drills, turnout area inspections,
and tested equipment compatibility. They also
assisted with the SABRE program (smoke
alarm battery replacement for the elderly).
While MFB had previously sent strike teams
interstate this was the first time appliances
were deployed. The crews attended more
than 60 fire calls. Fire and Rescue NSW
Commissioner Greg Mullins visited MFB crews
to personally thank them for their service.

COMMAND ROLES
Over summer MFB senior command staff
played a crucial role in state and regional fire
management. MFB’s Chief Officer was based
at the State Control Centre for the summer
as one of the Deputy State Controllers, while
MFB senior command staff rotated through
the role of State Duty Officer. Senior command
also rotated through the role of regional
controller for the Craigieburn (Hume Freeway
complex), Mickleham and Hazelwood fires.
This was the first time that MFB staff worked
in a truly integrated way with other emergency
management personnel at all levels of incident
control – from the State Control Centre to
the fireground.

HEATWAVE
In January 2014 there were four consecutive
days above 40°C and triple the number of call
outs compared to the previous year. To help
other Victorian agencies, including the CFA,
the Department of Environment and Primary
Industries (DEPI), and Ambulance Victoria,
MFB commissioned extra appliances and
increased the number of response crews.
MFB also:
•

allocated day workers to operational
appliances during the day

•

enabled rapid impact assessment and
strike teams for deployment in Geelong,
Ballarat, Stawell, Mildura and Ouyen

•

deployed nine new Mk5 pumper and
pumper tanker appliances

•

had corporate staff working in the State
Control and Incident Control Centres.

MFB SENT
ITS LARGEST
DEPLOYMENT IN
RECENT TIMES TO
NSW TO BACKFILL
STATIONS IN
METROPOLITAN
SYDNEY, EASING
THE PRESSURE ON
CREWS BATTLING
THE BLUE
MOUNTAINS BLAZE.

MFB crews deployed to Sydney
in October 2013.

MFB Annual Report 2013–14 17

A CHALLENGING
FIRE SEASON continued

HUME FREEWAY COMPLEX AND
REGIONAL DEPLOYMENTS
On the morning of 17 January 2014 MFB
responded to multiple fires along the Hume
Freeway. The fires were in both CFA and MFB
areas and the incident quickly escalated into a
ninth alarm fire involving MFB, the CFA, DEPI
and air support. Transfer of control was made
to the Gisborne Incident Control Centre under
the arrangements put in place by the Fire
Services Commissioner.

MORE THAN 385
FIRE AGENCY
PERSONNEL
WERE INVOLVED
IN THIS INCIDENT,
ON A DAY WHEN
351 CALLS WERE
RESPONDED TO
ACROSS VARIOUS
INCIDENTS.

MFB crews worked 24 hours
a day for six weeks with other
state emergency services to
contain the Hazelwood mine
fire in Morwell. Photo courtesy
Keith Pakenham.

18 MFB Annual Report 2013–14

This was the first time MFB had transferred
control of an incident to a remote control
centre and one of the first tests of the MFB’s
application of transfer of control. MFB, CFA
and DEPI crews worked together to bring
these challenging fires under control and the
MFB Control Unit performed a crucial role in
establishing a divisional command point to
direct resources.
More than 385 fire agency personnel were
involved in this incident, on a day when
351 calls were responded to across various
incidents. On the same day MFB sent
considerable resources to Stawell and
Halls Gap where bushfires were threatening
both towns.

around Melbourne, including major incidents
in Greensborough, Fawkner and Keilor that
threatened homes and industrial areas. MFB
crews also assisted CFA and DEPI crews in
combating the Mickleham and Warrandyte
fires where homes were destroyed. In total
MFB responded to 327 calls.

HAZELWOOD MINE FIRE
In Gippsland on 9 February CFA fire crews
were called to the Strzelecki Highway between
Morwell and Mirboo North where a fire quickly
moved through a timber plantation, before it
spread into the Hazelwood mine, starting a
major coal fire.
The following day MFB sent an advance senior
command team to Hazelwood to help set up
an incident management team. The incident
was changed from a non-structure fire to a
hazmat incident. Over the next six weeks MFB
had up to 100 people per day working at the
incident in various roles and contributed many
appliances to fight the fire.

THE WORST FIRE DANGER DAY
SINCE 2009

MFB hazmat and scientific officers worked
closely with the Department of Health and
EPA to establish carbon monoxide monitoring
protocols, firefighter health checks and work
instructions. This included regular health
monitoring of personnel working at and
visiting the mine and strict protocols.

9 February 2014 was the worst fire danger day
Victoria had experienced since Black Saturday.
MFB attended many grass and scrub fires

The Hazelwood fire was the longest
deployment in MFB’s history and the largest
joint activity it had participated in.

MFB IN THE
COMMUNITY
MFB continues to deliver programs and
partner with stakeholders to build the
community’s capacity to respond to and
recover from emergency incidents. This
includes engagement with groups who
are particularly vulnerable using innovative
approaches to fire prevention and an
increasing focus on research.

VICTORIAN BUILT ENVIRONMENT
RISK ASSESSMENT PROCESS
(VBERAP) GUIDELINE
MFB has led the development of the
VBERAP Guideline on behalf of the State
Fire Management Planning Committee. This
project draws knowledge and experience
from stakeholders across the emergency
management sector. It ensures a consistent
and structured approach to emergency risk
assessment in the built environment.
As a result communities will be better informed
about their risk profile and areas in most need
will be targeted for treatments. The guideline
was endorsed by the committee in June 2014.
In the coming year it will deliver comprehensive
support technology and a sustainable delivery
model at state, regional and municipal levels
throughout Victoria.

EDUCATION CAMPAIGNS
MFB continued to deliver education programs
targeting primary school children, teenagers,
the elderly and non-English speakers.
The Seniors Fire Safety program targets active
older people. Nearly 4,000 people attended
presentations through organisations such as
Lions, Rotary, Probus and ethnic and faith
based groups. The program won the Aged
and Disability category of the Victorian Fire
Awareness Awards in December 2013.
More than 2,000 copies of the Home Fire
Safety Booklet and Aged and Disability Insert
have been supplied to providers of community
aged care for their clients. This included copies
of both documents in more than a dozen
languages. The audio CD version is being
distributed for free at Vision Australia shops.
In collaboration with the Transport Accident
Commission, VicRoads, the Department of
Education and Early Childhood Development,
RACV, Victoria Police and CFA, MFB
continued the Fit2Drive road safety program
in secondary schools.

Based on recommendations from a coronial
hearing, the program has been incorporated
into the Victorian Government Action Plan
2013–2016. This will more than double the
program’s reach to about 500 schools and
60,000 students.
The Flames program delivers home fire safety
information to newly arrived secondary school
students via English language schools and
centres. It continues to grow with specially
trained operational firefighters delivering
presentations at 23 learning centres reaching
1,200 students. The program provides
students with important home fire safety
information they can share with their families.

SMOKE ALARMS
MFB formed a statewide Smoke Alarm Buyers
Group to support community aged and
disability care providers help their clients install
smoke alarms. This initiative fulfils a coronial
recommendation. A new stand-alone smoke
alarm with a built-in 10-year lithium battery
was identified as the most appropriate smoke
alarm to install. In two phases 98 agencies
purchased more than 10,000 smoke alarms.
The program more than halved the unit price of
$38 per unit, saving over $200,000.
To increase awareness about smoke alarms
an information session was developed and
delivered to 19 local government aged and
disability departments. This activity targeted
team leaders, case managers, assessors and
home maintenance workers.

IN TWO PHASES
98 AGENCIES
PURCHASED MORE
THAN 10,000 SMOKE
ALARMS. THE
PROGRAM MORE
THAN HALVED THE
UNIT PRICE OF $38
PER UNIT, SAVING
OVER $200,000.

HOARDING
The Hoarding Notification System has
received an increasing number of referrals
from agencies supporting people affected
by hoarding. The system enables a discreet
electronic alert to be placed on an address,
which activates via the Station Turnout System.
This increases firefighter preparedness and
safety in the event of a fire or other emergency
at the address. The system was a joint winner
of the Industry Category in the Victorian Fire
Awareness Awards in 2013.
A study into hoarding and squalor related
incidents, and the organisational response
to this growing issue, was conducted by
Worcester Polytechnic Institute. It confirmed
that hoarding and squalor incidents occur
in nearly every local government area in the
metropolitan district. Over the past nine
months the incident rate has been one
incident every four days.

MFB Annual Report 2013–14 19

MFB IN THE
COMMUNITY continued

THE DURACELL
CHANGE YOUR
CLOCK – CHANGE
YOUR SMOKE ALARM
BATTERY CAMPAIGN
RAN FOR THE
FOURTEENTH YEAR.

PUBLIC INFORMATION
CAMPAIGNS

COMPLIANCE AND ADVICE
SERVICES

MFB continued to deliver public information
campaigns with the CFA. The Duracell Change
Your Clock – Change Your Smoke Alarm
Battery campaign ran for the fourteenth year.
It reminds the community about the need to
ensure there is at least one working smoke
alarm on every level of every home. As well as
extensive traditional media, social media was
used to promote the campaign.

MFB provides many fire safety services
to industry through its Building Code of
Australia and audits, Building Inspection
and Compliance, Alarm Assessment, Fire
Investigation and Analysis, Dangerous Goods,
and Community Safety technical departments.

Over winter MFB and the CFA delivered the
Home Fire Safety campaign. It focused on
general fire safety in the home and high-risk
activities. Research to review the past five
years of this campaign was conducted by
Worcester Polytechnic Institute. The study also
reviewed incidents in terms of rate, room of
origin and severity. It included analysis of broad
engagement and current public campaigns
by other organisations aimed at behaviour
change. The research will be used to develop
new activities to increase the program’s
effectiveness.

JUVENILE FIRE AWARENESS
The Juvenile Fire Awareness and Intervention
Program is undertaking research with Victoria
University to better understand the factors
that may predict if a child or adolescent will
continue to set fires. The research is also
investigating the role of counselling and mental
health services. The research will be used to
establish a firefighter screening tool to measure
the risk of fire setting in young people, develop
referral pathways, identify gaps in knowledge
and competencies, and establish best practice
models to deal with fire risk behaviour.

MFB, Police, Ambulance and
SES participate in an emergency
services demonstration at the
opening of VEMTC.

20 MFB Annual Report 2013–14

The Alarm Assessment team attended
9,481 false alarms, 452 hazmat alarms and
conducted salvage at 86 incidents in the
last financial year. The team has recovered
about $9.6 million in fees associated with
false alarms and salvage work with damaged
sprinkler systems. This year there were 1.44
false alarms for each piece of alarm signalling
equipment (ASE). This is a slight reduction
from last year’s figure of 1.48/ASE. There are
around 6,500 ASEs in Melbourne.
MFB worked to resolve design issues on
the boundary of a residential development
in Windsor. The fire safety design solution
of the multi-storey building did not have an
appropriate level of fire protection. An appeal
was submitted by MFB to the Building Appeals
Board (BAB) also noting other fire safety
deficiencies in the building. The BAB ordered
the owners to install automatic fire protection
measures throughout.

MFB IN THE
COMMUNITY continued
Department

Service

Dangerous goods

Written advice

208

BCA and audits

Modifications

35

Community
Safety Technical
Department

Letters of advice

842

309 Applications

570

1003 Variations

411

Fire safety assessment

25

Fire engineering briefs

403

Letters of advice
Fire engineering reports

FIA

49

5

Suspicious fires attended

28

Electrical fires attended

59

Undetermined fires attended

5

Fatal (non-preventable)

3

Fatal (preventable)

5

Potential loss
Class 1B – A single dwelling being a detached house or
one or more attached dwellings

$25,113,100
$185,651,000
8

Class 2 – A building containing two or more sole
occupancy units each being a separate dwelling

65

Class 3 – A residential building, other than a class 1 or
2, which is common place of long-term or transient living
for a number of unrelated persons

39

Class 5 – An office building used for professional or
commercial purposes, excluding buildings of Class 6, 7,
8 or 9

27

Class 6 – A shop or other building for the sale of goods
by retail or the supply of services direct to the public

20

Class 7 – A building which is a carpark or is for storage
or display of goods or produce for sale by wholesale

15

Class 8 – A laboratory, or a building in which a handicraft
or process for the production, assembling, altering,
repairing, packing, finishing, or cleaning of goods or
produce is carried on for trade, sale, or gain.

31

Class 9A – A health care building
Class 9B – An assembly building in a primary or
secondary school, but excluding any other parts of the
building that are of another class
Class 9C – An aged care building

Table 3: Compliance and
advice services

291

Accidental fires attended

Actual loss

Building inspections
and compliance

2013–14

7
27

5

MFB Annual Report 2013–14 21

MFB
PARTNERS
Collaboration with our partners is the
bedrock of well-coordinated, seamless
emergency management service delivery
and a truly borderless organisation. MFB’s
partnerships took many forms during the
year. Major steps were taken in terms
of interoperability with other emergency
service agencies.

A BORDERLESS ORGANISATION

WHILE MFB IS
DELIVERING
EXCELLENT
SERVICE LEVELS,
THESE NEED TO
BE TRANSLATED
INTO THE SERVICE
DELIVERY
STANDARDS
EXPECTED BY
THE VICTORIAN
COMMUNITY.

The emergency management sector is
continuing to work closer together. This year
the role of the Fire Services Commissioner
was recast as the Emergency Management
Commissioner (which came into affect 1
July 2014). The Commissioner’s rolling
three-year Fire Services Reform Action Plan
is in its second year. The plan incorporates
a Leadership Integration Accountability
Framework. In addition, there are 19 projects
to be delivered by May 2016, aligned with the
following six strategic themes:
•

information and operational interoperability

•

state capability and capacity

•

common risk management and planning

•

community behaviour change

•

organisational improvement

•

governance and legislation.

MFB has made considerable progress
integrating these themes, concepts and
projects into the fabric of its service delivery.
Emergency Management Victoria has set clear
goals. While MFB is delivering excellent service
levels, these need to be translated into the
service delivery standards expected by the
Victorian community. This will be a challenge
for MFB and our partners. Effectively, MFB
will have to continue to deliver current service
levels while finding ways to further enhance
emergency management.

WORKING WITH PEAK BODIES
Extensive work was done through the
Australasian Fire and Emergency Services
Authorities Council (AFAC), the fire services
peak body, on Australian Standard 2419.
This is the standard for the installation of fire
hydrants. Work also occurred with AFAC on
a series of seminars on the use of lifts for
evacuation. Victoria has many multi-storey
buildings where lifts are used for evacuation,
in most cases because they only have one
stairway.

22 MFB Annual Report 2013–14

VICTORIAN EMERGENCY
MANAGEMENT TRAINING
CENTRE (VEMTC)
Construction of MFB’s world class training
facility at Craigieburn was completed in April
2014 as scheduled and within the $109 million
budget. The VEMTC will be proudly operated
by MFB on behalf of the State. The Operational
Training Department transitioned to the facility
in May 2014. Trainers have been educated so
they can safely operate the realistic live training
fire simulators which will be used to provide hot
fire training to emergency service personnel.
The facility will also provide training in specialist
technical rescue skills in line with Victoria’s all
hazards all agencies strategy. Training started in
July 2014 with selected courses to ensure that
the facility is fit for purpose.

MARINE DEVELOPMENTS
MFB’s marine response capability continued
to increase with ship-to-ship transfer training
courses in 2014. The courses train marine
firefighters in boarding ships both at anchor
and underway. The skills learned in these
courses are vital for marine assessment and
response activities, which form an integral part
of the Marine Concept of Operations. Fireboat
1 is MFB’s primary marine response vessel. Its
second vessel, a 12-metre rapid response fire
boat, is under construction in Canada and is
due for delivery to Melbourne in 2015.

JOINT AGENCY EXERCISES
MFB continues to plan and participate
in exercises to prepare for potential
emergency incidents.
MFB participated in a multi-agency incident
control centre exercise at Kangaroo Ground
in November 2013. During the exercise, the
incident management team responded to a
hypothetical bushfire in the Warrandyte area,
which proved useful when a bushfire broke out
in Warrandyte in February 2014.
In May 2014 MFB partnered with Victoria
Police, Ambulance Victoria, the SES,
Departments of Health and Human Services,
and City of Melbourne to run a marine
response exercise in Victoria Harbour.
MFB also participated in Exercise Smoke
House, a forum held at Melbourne Assessment
Prison (MAP). Located in West Melbourne
MAP is the only high-rise prison in Victoria and
has specific emergency management issues.
MFB also partnered with Metro trains,
Ambulance Victoria and Victoria Police to
practice incident scenarios in Melbourne’s
train tunnels. In addition, we partnered with
CityLink and VicRoads to run Burnley tunnel
incident scenarios.

MFB PARTNERS continued

EMERGENCY MANAGEMENT
JOINT PUBLIC INFORMATION
COMMITTEE (EMJPIC)

MFB also worked with the EMJPIC
and industry in the western suburbs on
consequence planning for an old tip site with
underground hotspot activity. This included
working with the site owner on monitoring and
mitigation strategies.

MFB has been working with the EMJPIC
on whole-of-government public information
and messaging. Substantial work was
done regarding the Hazelwood mine fire to
coordinate fire, health, environmental and
support service information for the Morwell
community and the State.

Honours and awards
• Commander Andrew O’Connell – Australian Fire Service Medal, Australia Day Honours
• Leading Firefighter Michael Whitty – Australian Fire Service Medal, Australia Day Honours
• Retired Firefighter Alan Eley – Order of Australia Medal, Australia Day Honours
• Retired Firefighter Ronald Barker – Order of Australia Medal, Australia Day Honours
• Commander Colin Matheson – Emergency Services Medal, Queen’s Birthday Honours
• Senior Station Officer Bryan Currie – CEO’s Safety Award 2013: for his leadership of the Fire Ground
Accountability System (FAST-card)
• Station Officer Wayne George – CEO’s Special Recognition Award 2013: for outstanding achievement in
leadership and community service
• Jan Smith – CEO’s Special Recognition Award 2013: for outstanding achievement in personal leadership
and continuous business improvement
• Station Officer Louise Cannon – Chief Officer’s Scholarship 2013: for pioneering research and leadership
in breathing apparatus telemetry and associated technologies
• LFF David Rylance – Surf Life Saving Australia’s Trainer of the Year, 2013 Awards of Excellence
• eMap (DEPI, CFA, MFB and SES) – 2013 Victorian Spatial Excellence Awards People and
Community Award winner and 2013 Fire Awareness Awards New and Emerging Information
Technologies Award winner.
• MFB Seniors Fire Safety Program – 2013 Fire Awareness Awards Aged and Disability Award winner
• The Hoarding Notification System – 2013 Fire Awareness Awards Industry/Service Award winner
Promotions

Long Service Awards

Chief Officer

1

45 years

2

Commander

20

40 years

10

Senior Station Officer

16

35 years

40

Leading Firefighter

80

30 years

6

25 years

149

Appointments
Executive Directors

2

15 years

3

Directors

2

10 years

188

Corporate (admin, technical, clerical)

14

Recruit Firefighters

48

MFB Annual Report 2013–14 23

MFB
PEOPLE
THE NEW JOINT
MFB AND CFA
RECRUIT COURSES
AT VEMTC
CRAIGIEBURN
SYMBOLISE THE
START OF AN
EXCITING NEW
CHAPTER IN
COLLABORATIVE
EMERGENCY
SECTOR TRAINING.

Table 4: Training programs
2013–14

Our people are passionate about what
they do. MFB has a strong organisational
culture and we strive to support our
people to achieve their own and the
organisation’s goals.

It has three objectives:
•

maximised interoperability, capacity,
capability, resilience and sustainability
through training that harnesses synergies
and improves consistency of practice

•

a hazards-specific approach to training that
capitalises on the knowledge and expertise
of the collective, reduces duplication of
effort and keeps our personnel safe

•

an innovative and flexible training model
for the collective that meets evolving
community needs and expectations,
and examines the most effective way
for fire and emergency services to train,
maintain skills and undertake professional
development.

TRAINING
The new joint MFB and CFA recruit courses
at VEMTC Craigieburn symbolise the start
of an exciting new chapter in collaborative
emergency sector training. The course, which
was developed in the last financial year and
will be delivered in August 2014, comprises 12
MFB and 12 CFA participants, and aligns with
the State Fire and Emergency Services Training
Framework. The framework aims to lay the
foundation for a unified approach to training
across Victoria’s fire and emergency services.

Course

Courses
delivered

Total
participants

Total
training days

Organisational
Recruit

2

48

170

Continuation/retention

4

96

32

20

80

80

Senior station officer

1

16

65

Commander

2

20

110

10

40

10

Ultra large pumper

1

4

4

Teleboom

4

16

16

Ladder platform

3

12

30

Heavy rescue

6

48

72

Hazmat technician

1

12

10

Control unit

2

4

14

Waterway emergency response

1

16

30

Swift water rescue

4

48

8

Driver training

8

48

64

Forklift

4

16

32

73

524

747

Leading firefighter

Operational
Water tanker

Total

24 MFB Annual Report 2013–14

MFB PEOPLE continued

REGISTERED TRAINING
ORGANISATION
MFB is a registered training organisation
(RTO) and is committed to meeting the
requirements of the Australian Quality Training
Framework (AQTF) standards for RTOs. The
AQTF provides the national framework that
registers and regulates organisations. This
ensures that the training MFB provides and the
qualifications issued by MFB are recognised
throughout Australia. MFB was audited during
the year and our registration as a RTO was
extended for five years – the maximum
period allowed.

EMERGENCY MEDICAL
RESPONSE TRAINING
The EMR program continued to build its
capacity during the year. Two recruit courses
(48 recruits) trained in EMR, 96 firefighters
completed retention training, and 395
firefighters undertook re-certification. MFB has
extended these sessions to Victoria Water
Police who have been attending with marine
response crews.

ORGANISATIONAL
DEVELOPMENT
A number of strategies are being implemented
that are designed to build a highly skilled,
involved and adaptable workforce, and
an organisational culture that encourages
collaboration, trust and innovation.
Performance and career development:
Paypoint Progression Assessment is
designed to clarify position objectives and
accountabilities, promote career development
and job satisfaction, and ultimately improve
organisational performance. It is a major
innovation arising from the new Corporate
and Technical Employees Agreement 2013
and implements a comprehensive suite
of administrative tools, capability-building
resources, and targeted communications.
These aim to ensure that our people are well
supported in working towards MFB’s goals.

Learning and development: MFB
this year offered five new learning and
development courses. The courses are:
Personal Effectiveness, Resilience in Change,
Valuing Difference and Human Rights, Giving
and Receiving Feedback, and Managing
Challenging Conversations.

HR SYSTEMS
MFB continues to invest in HR systems
that assist our people to be effective in their
roles. Key activities included: the upgrade
of the web-based executive performance
management system and development of an
online human rights and workplace respect
training module.

DIVERSITY AND INCLUSION
MFB has developed a Diversity and Inclusion
Action Plan to maintain a fair and inclusive
workplace culture. Actions include engaging
with communities to improve MFB’s service
delivery to diverse and vulnerable groups.
The plan will also help MFB: recruit and
retain quality staff from under-represented
groups; build organisation-wide leadership,
commitment and accountability; and meet
legislative obligations.

PHASE ONE OF
THE MFB SENIOR
LEADERSHIP
PROGRAM HAS
RESULTED IN A
POSITIVE SHIFT
IN LEADERSHIP
STYLES AND
CAPABILITIES,
GROUP COHESION,
AND ENGAGEMENT
OF OUR SENIOR
LEADERS.

Initiatives this year included: diversity and
inclusion awareness training; participation
on the Department of Justice Koori Inclusion
Action Plan Project Board; recruitment
strategies; and appointment of additional
equal employment contact officers. MFB also
improved the way it captures Aboriginal and
Torres Strait Islander employment data.

WORKPLACE BARGAINING
During the year both the Corporate and
Technical employees and the Mechanical
Workshops enterprise agreements were
finalised. MFB continues bargaining with the
United Firefighters Union and independent
bargaining representatives on new Senior
Operational Leadership and Operational
Employees agreements.

Leadership development: Phase one of the
MFB Senior Leadership Program has resulted
in a positive shift in leadership styles and
capabilities, group cohesion, and engagement
of our senior leaders. These outcomes directly
support MFB’s goal to create a workplace
culture that promotes constructive behaviours
and accountability.

MFB Annual Report 2013–14 25

MFB PEOPLE continued

MFBSAFE ALLOWS
FOR ACTIVE
REPORTING,
TRACKING OF RISK
CONTROLS AND
TREND ANALYSIS.
IT ALIGNS MFB
WITH OTHER
EMERGENCY
SERVICE
ORGANISATIONS AND
CONTRIBUTES TO
INTEROPERABILITY.

Table 5: Unplanned absences

Table 6: Dollar cost of overtime
Overtime types are prescribed by the
enterprise agreement for circumstances
where employees are redeployed to
other fire stations or retained on duty
to maintain crewing strength.

Table 7: WorkCover data

26 MFB Annual Report 2013–14

AUDIT OF UNPLANNED LEAVE

WORK HEALTH AND SAFETY

On 6 March 2013 the Auditor-General released
a report on unplanned leave in three of
Victoria’s emergency service organisations.
Unplanned leave at MFB is significantly higher
on weekends than weekdays leading to
increased overtime costs. Table 6 provides a
breakdown of leave by type. Table 7 provides a
breakdown of overtime costs by type.

MFB works to reduce the number and severity
of incidents, and uses systems and programs
to achieve better health and safety outcomes.
This year we implemented the Working Safely
Framework which sets the strategy for the
next three years. The framework will enhance
our safety systems and culture. Additional
performance measures have been developed
to improve monitoring of safety performance
with an increased focus on lead indicators.

MFB’s enterprise agreement limits
management approaches to this issue and
our systems and processes also contribute
to the costs of unplanned leave. MFB
is actively implementing all the audit
recommendations and the Strategy Planning
and Resources Committee of the Board is
monitoring this process.

Year

Sick
leave
%

Family
leave
%

Sick and
family
leave
%

MFB introduced new incident reporting
software, MFBSafe. It is a total work flow tool
to record hazards, near misses, incidents
and injuries. MFBSafe allows for active
reporting, tracking of risk controls and trend
analysis. It aligns MFB with other emergency
service organisations and contributes to
interoperability.

Hours
per
FTE

Target
hours
per
FTE

Work
Cover
%

Total
unplanned
absences
%

2013–14

4.2

2.1

6.3

138

<120

2.16

8.5

2012–13

4.0

2.1

6.0

128

<120

2.08

8.1

2011–12

4.5

2.0

6.5

133

n/a

2.10

8.6

Actual
($)

Total
overtime

Recall
overtime

Maintain
strength
overtime

Fire
call

Muster
and
dismissed

Standby
and
dismissed

Excess
travel

Other

2013–14

17,702,866

7,226,000

4,549,506

988,553

604,382

432,066

1,050,456

2,851,903

2012–13

13,115,000

5,343,000

3,878,000

770,000

661,000

356,000

1,148,000

959,000

2011–12

17,661,000

8,887,000

4,651,000

728,000

648,000

307,000

1,189,000

1,251,000

Year

Claims

Days lost

Number of lost time injuries

Severity rate

2013–14

373

5379

216

24.9

2012–13

353

5416

202

26.8

2011–12

310

4190

187

22.4

2010–11

298

4768

204

23.4

MFB PEOPLE continued
MFB is committed to having a fit and healthy
workforce to meet operational requirements.
We have implemented the Active for Life
program. This has been designed to promote
self-awareness and to highlight the risks of
ageing and inactivity.
This year there has been greater focus on
awareness training about the signs and
symptoms of various mental health problems.
Guidance material and other resources on the
different assistance that is available to staff
has been promoted and distributed. The Peer
Support program was also renewed to provide
access to support for our employees.
There was a 5.66 per cent increase in the
number of WorkCover claims compared
to the previous year. However, the number
that became standard claims has reduced.
There was a seven per cent increase in the
number of lost time injuries (one day or more
lost time), though the total number of days
lost decreased slightly. The severity rate has
decreased by 1.9 days (7.08 per cent) when
compared with 2012–13.

The return to work program has seen
improved results over the last year, with
employees returning to work in some capacity
more quickly following injury or illness. MFB
continued to use the Keiser and Strive
functional rehabilitation programs to assist
employees to return to or remain at work.
Regular case conferencing between medical
providers, return to work coordinators, claims
officers and claims agent representatives has
also led to positive results.

STAFF NUMBERS
In the last financial year MFB has recruited
an additional 46 firefighters. Overall firefighter
numbers decreased by seven this year due to
retirements. We also employed 14 additional
corporate personnel as a result of reduced
use of agency staff and recruiting targeted
skill sets into permanent roles to build MFB’s
internal capacity.
MFB has 1,988 male and 209 female
employees of which 26 hold senior positions
within the organisation.

Knee, lower back and shoulder injuries remain
the most common. However, injuries resulting
in the highest average number of lost time
days were hip and psychological injuries.
Musculoskeletal injuries accounted for 69 per
cent of all lost time.

Total

Total
permanent

Perm
full-time

Perm
part-time

Total
temporary

Temp
full-time

Temp
part-time

Employees

2,197

2,189

2,164

25

8

7

1

FTE

2,182.27

2,174.67

2,161.00

13.67

7.60

7.00

0.60

Employees

338

330.00

306

24

8.00

7

1

FTE

323.74

316.14

303.00

13.14

7.60

7.00

0.60

Operations Employees
staff
FTE

1,859

1,859

1,858

1

0

0

0

1,858.53

1,858.53

1,858.00

0.53

0.00

0.00

0.00

Employees

2,190

2,181

2,155

26

9

9

0

FTE

2,178.20

2,169.20

2,154.53

14.67

9.00

9.00

0.00

Employees

324

315

290

25

9

9

0

FTE

313.14

304.14

290.00

14.14

9.00

9.00

0.00

Operations Employees
staff
FTE

1,866

1,866

1,865

1

0

0

0

1,865.06

1,865.06

1,864.53

0.53

0.00

0.00

0.00

Table 8: Work force data

2014
Total

Corporate
staff

2013
Total

Corporate
staff

MFB Annual Report 2013–14 27

MFB PEOPLE continued

2500

4

3

1984

1982

2000

1500

1000

Figure 8: MFB employee
gender
Ongoing
Temporary

500

0

4

6

205

199

Females

Males

Females

Figure 9: MFB staff age
distribution (2014 and 2013)
Under 25

Males
2013

2014

0.5%

1.6%

16.2%

21.8%

0.9%

1.1%

15.8%

19.5%

25–34
35–44

21.2%

45–54

21.0%

55–64
Over 64

38.7%

41.7%

2014

2013

2500

Figure 10: Corporate versus
operational staff numbers

2000

1865

1859

1500

1866

Corporate

1859

Operations

1000

2014

2013
HEADCOUNT

28 MFB Annual Report 2013–14

313

324

0

324

338

500

2014

2013
FTE

INNOVATION AND
EFFICIENCY
MFB strives to provide world class
emergency management services in the
most efficient and effective way possible.
This means MFB constantly looks at ways
to improve how we work. During the year,
MFB maintained its focus on innovation
and improved internal processes to ensure
the best outcomes for the community.

FIRECOM REPLACEMENT
The ICT strategy identified the need to replace
the legacy Firecom dispatch system, which
processes information, such as the station
turnout of appliances to incidents based on
information received from ESTA (000). The
project to replace this system started during
the year, including consultation with various
stakeholders to obtain input into design
and development.

FAST-CARD
The Fireground Accountability System
T-card (FAST-card) began trials in September
2013. FAST-card was developed to improve
fireground accountability. It creates an
electronic log of appliances and their crews,
and the information is available to all other
MFB personnel. The system is installed
on station-based computers and mobile
telephones that are provided on appliances.
In April 2014 the trial of FAST-card was
expanded to include GPS tracking of
appliances to provide more accuracy about
the location of the appliance and incident.

TENDERLINK
All tenders are now processed using
TenderLink, an online tender management tool
owned by Fairfax Digital. The system has more
than 250,000 suppliers registered in Australia,
enabling MFB to identify new suppliers. MFB
can receive up to 30 applications for some
tenders. TenderLink eliminates double handling
and ensures all deadlines are adhered to. It
also means it is now possible to advertise,
issue, manage and monitor all tenders online.

SECURE PRINTING
MFB successfully completed a pilot on secure
printing at the Burnley Complex. Secure
printing has since been enabled on most multifunction devices at Burnley and at VEMTC
in Craigieburn. Secure printing reduces the
need for dedicated printers for confidential
documents and eliminates the possibility of
documents being left uncollected at printers.
This also allows MFB to consolidate printer
hardware, reduce power consumption,
maintenance and costs.

DATA CENTRE UPGRADES
A program of works to improve the resilience
of the Eastern Hill and Baker Street data
centres was completed during the year. It
included the installation of an uninterruptible
power supply and computer room air
conditioning. This enables MFB to improve
interoperability by hosting equipment for other
agencies, such as Ambulance Victoria and
CFA. The improved systems also allow quicker
recovery after unplanned outages, and reduce
data loss and re-work.

SAP UPGRADE
MFB is upgrading SAP for MFB, SES and CFA.
The upgrade will deliver a contemporary SAP
system for all three agencies. It will improve
availability and reliability, and help MFB achieve
its objectives and obligations to stakeholders
and the community. This is one of a number of
MFB projects that will improve interoperability
in Victoria’s emergency service agencies.

IN APRIL 2014 THE
TRIAL OF FAST-CARD
WAS EXPANDED
TO INCLUDE GPS
TRACKING OF
APPLIANCES TO
PROVIDE MORE
ACCURACY ABOUT
THE LOCATION OF
THE APPLIANCE
AND INCIDENT.

PROPERTY AND ASSETS
In 2013–14 construction commenced on
two new fire stations in Glen Iris and Altona,
and Sunshine Fire Station was refurbished.
Commander accommodation at the Ormond
Fire Station was also completed. The
refurbishment of Greensborough Fire
Station commenced.

MFB Annual Report 2013–14 29

INNOVATION
AND
EFFICIENCY continued

MFB IS UNDERTAKING
AN ENERGY AND
WATER EFFICIENCY
PROGRAM ACROSS
27 FIRE STATIONS,
CORPORATE OFFICES,
AND TRAINING AND
MAINTENANCE
FACILITIES.

ENVIRONMENT

•

MFB has a social and environmental
responsibility to reduce the impact of its
operations on the environment. This public
commitment is formalised within MFB’s
Environment Policy, and implemented through
its environment strategy and risk-based
Environmental Management System (EMS).

MFB has successfully transitioned to the
Victorian Government’s environmental
data management system, Eden Suite.
This web-based service collects wholeof-government utility data direct from
suppliers. It allows MFB staff to access
real-time data on energy and water use.

•

MFB has finalised the phase out of Tridol
and 3M ATC foams on all appliances,
replacing them with Solberg foam for
environmental, operational and OHS
reasons. This will have major environmental
benefits over time.

•

MFB has continued to use our extensive
building sub-metering system. This system
has enabled us to identify problems such
as water leaks and allowed us to take
quick action to rectify issues.

•

The waste recycling rate has improved
over the year with the help of a new
waste contract.

•

Key staff were trained in the Global
Reporting Initiative sustainability reporting
framework as part of a corporate social
responsibility (CSR) initiative. Further work
planned includes research into the potential
application of an MFB CSR framework.

Since 2005–06 MFB has reported on
its environmental performance and the
implementation of its EMS based on
international standard AS/NZS ISO14001,
Environmental Management Systems.
The strategy reflects organisational goals
and ensures compliance with government
policies and statutory requirements.
Highlights of MFB’s environmental program
during 2013–14 are as follows.
•

•

Figure 11: Greenhouse gas
emissions (tCO2-e) 2013–14

An Environment Committee was
established that reports quarterly to MFB’s
executive leadership team (ELT). The
committee comprises representatives from
across MFB. It implements the strategy
and examines policy and operational
issues, monitors MFB’s compliance with
government objectives and progress
against targets.
MFB is undertaking an energy and water
efficiency program across 27 fire stations,
corporate offices, and training and
maintenance facilities. This is part of the
Victorian Efficient Government Buildings
program. It will achieve greenhouse gas
reductions of about 13 per cent by 2022.
This program will help MFB reduce water
and energy use, creating long-term utility
cost savings.

6%

1%

Electricity
Waste disposal
Natural gas

13%

Operational fleet
Light fleet
Air travel

7%
12%

30 MFB Annual Report 2013–14

61%

INNOVATION
AND
EFFICIENCY continued
Environmental
indicator

Unit of
measure

2005–06
baseline

2008–09

2009–10

2010–11

2011–12

2012–13

2013–14

kL per
FTE

15.7

14.1

11.9

11

11.5

14.6

13.5

kL

29,171

28,047

24,620

22,504

24,323

32,284

30,031

per cent

15

15

15

15

25

25

8

Energy consumption
per FTE

GJ per
FTE

24.1

25.7

24.0

25

24.9

24.2

21.8

Energy consumption

GJ

44,788

51,330

49,892

50,440

52,487

51,634

48,555

Water

2

Consumption
per FTE3
Total consumption

Energy (electricity and gas)4
Green Power
purchased5

Greenhouse emissions6 (tCO2-e)
7

Waste disposal

2,407

2,375

2,198

2,575

2,582

2,365

2,096

Electricity and
gas use

9,397

10,596

10,604

10,662

9,782

9,844

11,168

Light fleet

1,140

1,271

1,233

1,187

1,417

1,304

1,146

Operational fleet

1,838

1,950

1,952

1,980

1,810

1,888

1,977

n/a

68

140

197

145

166

156

14,782

16,260

16,127

16,601

15,736

15,566

16,544

8

Air travel (flights)

Total MFB greenhouse
emissions

Total use
Average recycled
content

reams
per FTE

4.9

4.6

4.1

3.8

3.7

3.6

3.5

reams

9,028

9,024

8,543

7,813

7,721

7,647

7,718

per cent

n/a

49

49

49

95

93

97

Waste and recycling10
Waste generated
per FTE
Total waste
Total recycled

m3 per
FTE

3.8

3.4

3.3

3.5

2.7

3.7

3.2

m3

7,060

6,643

6,792

7,198

5,712

7,902

7,109

per cent

25

21

21

21

24

34

35

Transportation (light fleet)11
Fuel consumption
per FTE

GJ per
FTE

9.2

GJ

17,079

17,742

17,123

16,545

19,097

17,525

15,387

Travel (light fleet)
per FTE

kilometres
per FTE

2,186

2,126

2,035

2,163

2,278

2,260

1,801

Total travel
(light fleet)

kilometres

4,059,721

4,239,766

4,221,467

4,445,069

4,808,055

4,821,575

4,018,711

Total fuel
consumption

1 MFB facilities do not undertake
office-based activities in isolation
of operational activities. (Vehicle
maintenance, firefighting and skills
maintenance occur at sites undertaking
administration and office-based
activities.) Paper, waste, water and
energy data is reported for all MFB
facilities (fire stations, offices and
training facilities) for the period of
April 2013 to March 2014. Delayed
quarterly utility invoice periods prevent
30 June data from being available
until September 2014. Reported
data excludes all usage and waste
associated with direct fire fighting
activities.
2 Water use data is metered potable
water for all MFB sites. Usage does
not include water used in operations
or training.
3 FTE – full-time equivalent staff for
the period (April 2013 to March 2014)
of 2,232.
4 Energy use includes electricity and
natural gas consumed at MFB offices,
training centres and fire stations.
5 MFB stopped purchasing GreenPower
on 31 July 2013.

Paper 9
Use per FTE

Table 9: Environmental indicator
report (FRD24c)1
Reporting period April 2013 to
March 2014

8.9

8.3

8

9

8.2

6.9

6 Greenhouse gas emissions are
reported using scope 1, 2 and 3
emission factor calculations from the
Australian Government Department
of Climate Change and Energy
Efficiency’s National Greenhouse
Accounts Factors 2013. Greenhouse
emissions from operational fleet include
emissions from use of fire trucks and
appliances.
7 Waste greenhouse gas emissions
have been calculated using collected
bin volumes and assuming the landfill
waste composition of 40 per cent food:
40 per cent paper: 20 per cent textiles.
8 Flight greenhouse gas emissions have
been calculated in accordance with the
Greenhouse Gas Protocol 2006.
9 One ream is 500 sheets of A4 paper.
Recycled content is calculated as
the average percentage of recycled
content of paper purchased.
10 Waste and recycling measurements are
based on total volume of bins collected
from MFB sites (m3).
11 Transportation light fleet includes all
corporate administration vehicles
(hybrids, LPG and unleaded petrol
cars). It excludes all operational
vehicles.

MFB Annual Report 2013–14 31

CORPORATE
GOVERNANCE
STATEMENT
This statement outlines MFB’s corporate
governance practices.

•

RESPONSIBLE MINISTER
The responsible minister is the Minister for
Police and Emergency Services.

FUNCTIONS AND POWERS
MFB is a statutory body established in Victoria
pursuant to the Metropolitan Fire Brigades Act
1958 (MFB Act). MFB derives its operational
powers from the MFB Act, the Metropolitan
Fire Brigades (General) Regulations 2005 (MFB
Regulations), the Metropolitan Fire Brigades
(Contributions) Regulations 2009, the Country
Fire Authority Act 1958, the Electricity Safety
Act 1998, the Emergency Management Act
1986, the Emergency Management Act
2013, the Gas Safety Act 1997, the Building
Act 1993, the Building Regulations 2006,
the Residential Tenancies Act 1997, the
Residential Tenancies (Caravan Parks and
Movable Dwellings Registration and Standards)
Regulations 2010 and other legislation.
MFB’s principal decision making powers
affecting members of the public are in the MFB
Act and the MFB Regulations, and should be
referred to in the first instance.

MFB CORPORATE GOVERNANCE
FRAMEWORK
MFB’s corporate governance framework
comprises documents and practices which
assist it to comply with its internal and
legislative obligations. These include:
•

the Corporate Governance Charter,
which sets out the composition, roles,
and accountabilities of the Board of
Management, Board Committees, and
their members

•

a policy framework and hierarchy of
documents, which provides for the
development, approval, implementation,
publication and review of organisational
policies and procedures

•

individual policies addressing governance,
financial, and strategic issues (such as risk
management, fraud control, financial code
of practice, and health, safety and welfare)
which the Board approves periodically

•

policies addressing operational matters
periodically approved by management.

MFB’s headquarters are located at 456
Albert Street, East Melbourne Victoria 3002,
Australia.

CHANGES TO GOVERNING
LEGISLATION
The Emergency Management Act 2013
became law on 3 December 2013 and
commenced operation on 1 July 2014.
The Act amends but does not replace the
Emergency Management Act 1986. The Act is
a further step in the reform of the emergency
services sector in Victoria following the
publication of the White Paper.

32 MFB Annual Report 2013–14

Major emergencies will be categorised as
Class 1 or Class 2. A Class 1 emergency is
a major fire or any other major emergency
where MFB, the CFA or the SES are the
designated control agency under the
state emergency response plan. A Class
2 emergency means a major emergency
which is not a Class 1 emergency. A Class
2 emergency and is also not a warlike act,
act of terrorism, hijack, siege or riot.

The Corporate Governance Charter, policy
framework, and hierarchy of documents have
been reviewed and updated in 2013–14 to
strengthen MFB’s corporate governance
framework.

THE BOARD OF MANAGEMENT

The most significant changes introduced by
the Emergency Management Act 2013 are
the following.

The Board is responsible for the overall
governance of the organisation including its
strategic direction, goals for management and
monitoring the achievement of these goals.

•

COMPOSITION OF THE BOARD

The offices of the Fire Services
Commissioner and the Emergency
Services Commissioner were abolished
and replaced by the Emergency
Management Commissioner and InspectorGeneral for Emergency Management.

The Act allows for up to seven Board members
to be appointed by the Governor in Council,
one of whom is to be appointed President and
another Deputy President.

CORPORATE
GOVERNANCE
STATEMENT continued
Board members in office for the year were:
• Neil Comrie (President)
• Ken King (Deputy President)
• Jay Bonnington
• Alf Long
(retired 13 September 2013)
• John Lord
• David Purchase
• Therese Ryan
(commenced 20 August 2013)
• Stuart Alford
(commenced 14 September 2013)

BOARD PERFORMANCE

The Board met on 10 occasions in
2013–14. Executives, operational staff and
representatives of other organisations are
invited to Board meetings when required for
discussions on relevant items.

This committee assists the Board to fulfil
its corporate governance and oversight
responsibilities in relation to risk management
and internal control systems, accounting
policy and practices, internal and external
audit functions, and financial reporting.
The Committee does not relieve any Board
member of their responsibilities for these
matters.

CODE OF CONDUCT
The Board adheres to the principles contained
in the Directors’ Code of Conduct developed
by the State Services Authority (SSA).
(The Victorian Public Sector Commission
succeeded the SSA from 1 April 2014.)
The Board complies with section 21 of the
MFB Act which requires that members of the
Board do not place themselves in a position
where there is conflict, actual or potential,
between their private interests and the duty
owed to MFB. The Corporate Secretary
maintains a register of members’ interests.
A schedule of Board members’ interests is
provided to each Board meeting for Board
members’ information.
All Board members and staff are required
to act with integrity in the performance of
their duties. The MFB Board and Executive
Leadership Team are committed to the
promotion of the Public Sector Values and
Employment Principles in section 7 of the
Public Administration Act 2004.

BOARD PROFESSIONAL
DEVELOPMENT
All Board members have the opportunity to
visit MFB facilities and meet with management
and operational staff to enhance their
understanding of operational issues and the
business. The Board has a formal induction
program for new Board members covering the
nature of the business, financial management,
key performance indicators, current issues,
corporate strategy and the expectations of
the Board concerning the performance of
Board members. Board members have also
attended seminars and conferences on current
operational and governance issues.

The Board regularly conducts evaluations
of its own performance and that of its
committees. It also continues to implement the
recommendations of the externally facilitated
Board performance reviews.

BOARD COMMITTEES
The Board’s committee structure is set
out below.
Risk and Audit Committee

Membership
• Jay Bonnington (Chair)
• David Purchase
• Stuart Alford
• Neil Comrie (ex officio)
• Alf Long (retired 13 September 2013)
Strategy, Planning and Resources
Committee
This committee assists the Board to ensure the
efficient and effective allocation of resources to
implement MFB’s strategic and business plans.
Membership
• Ken King (Chair)
• Jay Bonnington
• John Lord
• Therese Ryan
• Stuart Alford
• Neil Comrie (ex officio)
Health and Safety Committee
This committee assists the Board to fulfil its
responsibilities in relation to health and safety
matters arising out of the activities of MFB, as
they affect employees, contractors and the
community.
Membership
• John Lord (Chair)
• Ken King
• David Purchase
• Therese Ryan
• Neil Comrie (ex officio)
• Alf Long (retired 13 September 2013)
• Volker Maier (independent advisor)

MFB Annual Report 2013–14 33

CORPORATE
GOVERNANCE
STATEMENT continued
Executive Remuneration Committee
The whole Board acts as the Executive
Remuneration Committee when required.
Ad hoc committees
Ad hoc committees may be formed to address
specific important issues arising from time to
time, especially those which pose a high level
of risk.

INTERNAL CONTROL
The Board acknowledges that it is responsible
for oversight of the MFB’s overall internal
control framework. To assist in discharging
this responsibility, the Board has overseen
management’s instigation of an internal control
framework that can be described as follows.

Table 10: Attendance by
Board Members (expressed
as number of meetings
attended/meetings
eligible to attend)

34 MFB Annual Report 2013–14

•

Strategic and Business Plan – MFB’s
performance in delivering corporate
objectives is monitored by the Board
throughout the year.

•

Financial reporting – there is a
comprehensive budgeting cycle with an
annual budget approved by the Board
and the Minister. Monthly actual results
are reported against budget and revised
forecasts are prepared regularly.

•

Internal audit – through the Board’s Risk
and Audit Committee a comprehensive,
three-year, rolling internal audit program
is established. It includes financial,
operational and system processes and
controls. MFB has engaged an external
service provider as its Internal Auditor.

•

Investment appraisal – MFB has clearly
defined guidelines for capital expenditure.
These include measurement against
corporate objectives, annual budgets,
detailed appraisal and review procedures,
and levels of delegated authority.

Board

Number of meetings
to 30 June 2014

Risk and
Audit
Committee

•

Corporate policies – major new policies
and amendments to existing policies are
approved by the Board and communicated
to all employees. MFB’s policy framework
includes management policies, general
orders, and standard operating
procedures, which are approved by
management.

RISK MANAGEMENT
The MFB risk management framework
and policy were reviewed for effectiveness,
adequacy, suitability and improvement during
the year, confirming MFB’s commitment to risk
management.
Processes – such as annual business and
strategic planning, the integration of risk
management, and MFB’s risk appetite – have
been enhanced to enable MFB to receive
better risk and assurance insights. Directorate
risks are recognised and articulated, enabling a
comprehensive risk profile to be developed for
the coming year.
During 2013 the Victorian Managed Insurance
Authority (VMIA) completed a Risk Framework
Quality Review of MFB’s Risk Management
Framework. The review is independent and
designed to assist senior leaders to identify
their current risk maturity and opportunities
to enhance their risk management practices.
The review compared MFB’s risk management
approach with VMIA’s seven-element risk
maturity model which is based on the
Australian Standard for Risk Management AS/
NZS ISO 31000:2009. The review described
MFB’s risk maturity level as effective.

Strategy,
Planning and
Resources
Committee

Health and
Safety
Committee

Executive
Remuneration
Committee

10

5

3

4

2

N. Comrie

9/10

3/5

2/3

4/4

2/2

K. King

9/10

3/3

4/4

1/2

S. Alford

9/10

5/5

3/3

2/2

J. Bonnington

8/10

4/5

3/3

2/2

J. Lord

9/10

D. Purchase

9/10

T. Ryan

9/9

A. Long (retired
13 Sept 2013)

1/1

3/3
5/5
2/3
1/2

4/4

2/2

4/4

2/2

2/3

2/2

CORPORATE
GOVERNANCE
STATEMENT continued
The review also highlighted some opportunities
for improvement. These include:
•

developing key risk indicators to monitor
the impact on performance and the
achievement of objectives

•

enhancing risk driver identification to help
prioritise treatment plans

•

developing targeted risk management
training to build capability

•

documenting how inter-agency risks
are assessed and treated to support
interoperability.

COMPLIANCE WITH THE
VICTORIAN GOVERNMENT RISK
MANAGEMENT FRAMEWORK
Under the Victorian Government Risk
Management Framework all government
agencies and departments must include a
statement in their annual reports attesting
to the effectiveness of three elements of the
organisational Risk Framework.
Direction 4.5.5 Risk Management Compliance,
of the Standing Direction of the Minister for
Finance, requires a report on the application
of the Victorian Risk Management Framework
by departments and agencies defined as
public bodies in section 3 of the Financial
Management Act.
The following standard Risk Attestation
Statement was presented to the Risk and
Audit Committee at its meeting on 20 May
2014. This statement is consistent with the
template in the Victorian Government Risk
Management Framework.

Attestation of Compliance with
the Victorian Government Risk
Management Framework
I, Neil Comrie, President of the Board,
certify that the Metropolitan Fire and
Emergency Services Board has risk
management processes in place
consistent with AS/NZS ISO 31000:2009
and an internal control system is in place
that enable the executive to understand,
manage and satisfactorily control risk
exposures. The Metropolitan Fire and
Emergency Services Board verifies this
assurance and that the risk profile of the
Metropolitan Fire and Emergency Services
Board has been critically reviewed within
the last 12 months.

INSURANCE
In accordance with legislative requirements
and the Insurance Management Policy for
General Government Sector issued by the
Victorian Government, the VMIA manages nine
insurance policies on behalf of the Board. The
policies are reviewed annually by MFB and
the VMIA for their adequacy when measured
against MFB’s service delivery activities and
residual risk profile.
Although VMIA provides a claim service,
most losses and claims, in particular those
associated with motor vehicle incidents, are
handled internally, as they are usually below
policy deductibles. This arrangement is the
most efficient in terms of claims management
costs.
Insurance Attestation – Full Compliance
I, James Higgins, Accountable Officer,
certify that the Metropolitan Fire and
Emergency Services Board has complied
with Ministerial Direction 4.5.5.1 –
Insurance.

MFB Annual Report 2013–14 35

CORPORATE
GOVERNANCE
STATEMENT continued

CONSULTANCIES UNDER $10,000
There were two consultants engaged in
2013–14 where the fees for each consultant
were less than $10,000. The aggregate
amount for these two consultancies was
$11,450. These figures exclude GST.

Table 11: Consultancies over
$10,000

During 2013–14, there were no contracts with
a value greater than $10 million entered into
by MFB. Contracts with a value of $100,000
and above are placed on www.tenders.vic.gov.
au in accordance with Victorian Government
Purchasing Policy.

Consultant

Purpose of
consultancy

Start
date

End
date

Total
approved
project fee
(excld.
GST)

Expenditure
2013–14
(excld.
GST)

Future
expenditure
(excld. GST)

Linus Information
Security

Thornbury –
Business
Continuity Plan

September
2013

February
2014

$30,854

$30,854

nil

Madison Cross

Procurement
Improvement
Program

May 2013

February
2014

$39,850

$39,850

nil

Colmar Brunton

Community
Resilience
Research

November
2013

February
2014

$25,461

$25,461

nil

There
Communications

Communications
strategy and
implementation

April 2014

June 2014

$30,000

$27,500

nil

Deloitte Touche
Tohmatsu

PIAWE Project

April 2013

December
2013

$55,867

$55,867

nil

Deloitte Touche
Tohmatsu

Evaluation of
Strategies and
Business Ops –
2014

November
2013

March
2014

$29,370

$29,370

nil

Deloitte Touche
Tohmatsu

Strategic Review
of FES

July 2013

Closed

$25,000

$24,179

nil

Deloitte Touche
Tohmatsu

MFB Review of
VEMTC pricings

January 2014

July 2014

$36,540

$36,540

nil

IKD

MFB Review of
purchasing of
external legal
services

May 2013

July 2013

$22,200

$13,200

nil

IKD

MFB Review
legal panel
tender
submissions

August 2013

November
2013

$17,600

$17,600

nil

Trisigma

MFB Review
of Health and
Safety Dept

May 2013

December
2013

$65,922

$65,922

nil

Communications
for Health P/L

Health Assess
Standards for
Firefighters

November
2013

February
2014

$21,000

$21,000

nil

Deloitte Touche
Tohmatsu

SAP/AIX Review

October
2013

December
2013

$135,000

$135,000

nil

Lodestone

SAP Detailed
design

March 2014

June 2014

$44,500

$44,500

nil

Fujitsu

SAP Upgrade
Assessment

September
2013

December
2013

$75,000

$75,000

nil

Fujitsu

SAP Upgrade
Assessment

May 2013

July 2013

$20,000

$20,000

nil

Deloitte Touche
Tohmatsu

Current State
Discovery and
Initiation

February
2014

June 2014

$301,254

$200,903

$100,351

$975,418

$862,746

$100,351

Total

36 MFB Annual Report 2013–14

MAJOR CONTRACT
COMPLIANCE

CORPORATE
GOVERNANCE
STATEMENT continued

VICTORIAN INDUSTRY
PARTICIPATION POLICY ACT 2003
The Victorian Industry Participation Policy
(VIPP) applies when contracts greater than
$3 million in the metropolitan area are entered
into. During 2013–14, two contracts were
entered into by MFB that exceeded $3 million.
The contracts were for the construction of
Altona and Glen Iris Fire Stations.

COMPLIANCE WITH THE
BUILDING ACT
The MFB occupied property portfolio meets
the compliance requirements of the Building
Act 1993.

NATIONAL COMPETITION POLICY
The relevant part of the policy is in Part
IV of the (Restrictive Trade Practices) of
the Competition and Consumer Act 2010
(Cwlth). MFB activities affected by the
Victorian Government’s Competitive Neutrality
Policy have been reviewed and found to be
compliant.

FREEDOM OF INFORMATION
ACT 1982
The Chief Executive Officer, Mr James Higgins,
is the Principal Officer for the purpose of
administering the requirements of the Freedom
of Information Act 1982. The authorised
officers are Ms Jan Smith, Freedom of
Information Officer and Ms Militsa Toskovska,
Manager Governance.
Requests to MFB for access to documents
under the Freedom of Information Act must be
in writing and addressed to:
Freedom of Information Officer
Metropolitan Fire and Emergency
Services Board
456 Albert Street
East Melbourne VIC 3002

Enquiries about the information required to
be published and made available to members
of the public in accordance with sections
7, 8 and 11 of the Freedom of Information
Act should be directed to the Freedom of
Information Officer.

2013–14 FOI STATISTICS
During the year MFB received 344 requests for
access to documents under the Freedom of
Information Act.
Requests received

344

Access granted
Part access

2
336

Denied

6

Applicant did not proceed

0

Not finalised as at 30 June 2014

1

Appeal Avenues
Internal Review

0

FOI Commissioner

1

VCAT Hearing

0

PROTECTED DISCLOSURE ACT
2012
The Corporate Secretary, Mr Blair Trask, is
the Protected Disclosure Coordinator for the
purpose of administering the requirements of
the Protected Disclosure Act 2012, (previously
the Whistleblowers Protection Act 2001).
Ms Militsa Toskovska is the Protected
Disclosure Officer.
In accordance with the requirements of section
58 of the Protected Disclosure Act, MFB
has established a policy and guidelines for
responding to disclosures lodged. These are
available on the website www.mfb.vic.gov.au

Each application must clearly identify the
documents sought and be accompanied by
a $26.50 application fee (as at 1 July 2014).
General enquiries relating to freedom of
information can be made by contacting the
Freedom of Information Officer on telephone
9662 2311 between 8.30 am and 5.00 pm,
Monday to Friday.

MFB Annual Report 2013–14 37

CORPORATE
GOVERNANCE
STATEMENT continued
Disclosures

Table 12: Disclosures

2013–14

2012–13

Protected disclosures lodged

0

0

Referred by MFB to the Ombudsman or IBAC for determination
as to whether they were public interest disclosures

0

0

Disclosed matters referred to MFB by the Ombudsman or IBAC

0

0

Disclosed matters referred by MFB to the Ombudsman or IBAC
for investigation

0

0

Investigations of disclosed matters taken over by the
Ombudsman or IBAC from MFB

0

0

Requests made under section 74 (requests to Ombudsman by
person making disclosure) during the year to the Ombudsman to
investigate disclosed matters

0

0

Disclosed matters that MFB declined to investigate

0

0

Disclosed matters substantiated on investigation

0

0

Recommendations of the Ombudsman under the Act

0

8

ADDITIONAL INFORMATION
AVAILABLE ON REQUEST
In compliance with the requirements of the
Standing Directions of the Minister for Finance,
details in respect of the information items
below have been retained by MFB and are
available on request (subject to freedom of
information requirements, if applicable):
(a) a statement that declarations of pecuniary
interests have been duly completed by all
relevant officers of the agency
(b) details of shares held by senior officers as
nominee or held beneficially in a subsidiary
(c) details of publications produced by the
agency about its activities and where they
can be obtained
(d) details of changes in prices, fees, charges,
rates and levies charged by the agency
for its services, including services that are
administered
(e) details of any major external reviews
carried out in respect of the operation of
the agency
(f) details of any other research and
development activities undertaken by the
agency that are not otherwise covered
either in the report of operations or in a
document which contains the financial
statement and report of operations

38 MFB Annual Report 2013–14

(g) details of overseas visits undertaken
including a summary of the objectives and
outcomes of each visit
(h) details of major promotional, public
relations and marketing activities
undertaken by the agency to develop
community awareness of the services
provided by the agency
(i) details of assessments and measures
undertaken to improve the occupational
health and safety of employees, not
otherwise detailed in the report of
operations
(j) a general statement on industrial relations
within the agency and details of time lost
through industrial accidents and disputes,
which are not otherwise detailed in the
report of operations
(k) a list of major committees sponsored
by the agency, the purposes of each
committee and the extent to which the
purposes have been achieved.
The information is available on request from:
MFB Headquarters
456 Albert Street
East Melbourne VIC 3002
(03) 9662 2311

Metropolitan Fire and Emergency Services Board

FINANCIAL REPORT 2014–15

MFB Annual Report 2014–15 39

MANAGEMENT
DISCUSSION AND ANALYSIS
Comprehensive operating statement
The net result for 2013–14 was a surplus of
$2 million which compares to the $1 million
surplus in 2012–13; this result has been
achieved in an external environment of low
interest rates and internal cost pressures.
MFB have established and executed a financial
sustainability strategy to achieve increased
efficiency over expenditure, optimise revenue
streams and better manage the deployment of
capital without impacting on front line services.
During the financial year, MFB incurred a
number of significant costs associated with
the summer fire season. This participation
with other emergency services organisations;
which is part of a more joined up approach
to emergency management at regional and
interstate incidents including the significant
Hazelwood coal seam fire, significantly
impacted salaries, overtime and operating
costs. These costs, excepting those relating
to the NSW fires, were recovered by a
Treasurer’s Advance from the State of Victoria
of over $12 million.
Additionally, asbestos identified at the Eastern
Hill and Thornbury Complexes was removed
and the sites remediated which resulted in
unplanned expenditure in excess of $4 million.
The comprehensive result for the 2013–14
financial year was a $2 million surplus as
compared to a comprehensive surplus of $20
million for 2012–13. The reduction reflects
that the prior financial year included the $19.8
million building revaluation gain, whereas
in the current financial year there were no
revaluations of property, plant or equipment.

40 MFB Annual Report 2013–14

Total operating transactional income for
2013–14 was $375 million, an increase of $22
million on 2012–13. The increase accounts for
the inclusion of the Treasurer’s Advance ($12
million) and the 2.5 per cent indexation applied
to State grants that replaced the previous
funding source of contributions. Grant income
was also adjusted to account for broker and
property owner contributions replaced by the
new Fire Service Levy (FSL). Sales of goods
and services increased $2 million due to
increased fire equipment services and sales
and false alarm call charges. Interest and
dividend income reduced by approximately
$2 million due to reduced market interest
rates coupled with reduced average term
investment balances.
Total operating transactional expenses for
the financial year increased from $352 million
(2012–13) to $373 million (2013–14), an
increase of $21 million (6 per cent) which
reflects increased employee expenses of
$13 million relating significantly to additional
overtime at the Hazelwood coal seam fire
and regional fires ($6.7 million), award salary
increases, increased superannuation, payroll
tax and WorkCover expenses. Operating
expenses also reflect increased depreciation
of $2 million impacted by the new Victorian
Emergency Management Training Centre
(VEMTC) and other operating expenditure
which increased by $6 million due significantly
to the asbestos remediation matter.
Overtime expenditure recorded an overall
increase due to MFB involvement at the
Hazelwood and regional fires. However, after
adjusting for this one-off event overtime cost
in reality declined for the second successive
reporting period.

MANAGEMENT
Other economic flows included in
net result
Included in the comprehensive surplus were
net gains pertaining to other economic flows
of $2 million representing a loss on nonfinancial assets of $0.4 million consisting
of an impairment loss on property and
the amortisation of the optic fibre licence
agreements; offset by a revaluation gain of
$0.6 million in employee leave provisions
caused by changes in long term discount
rates and a marginal revaluation loss on
financial investments reflecting the year end
fair market valuations.
In accordance with accounting standards,
all property, plant and equipment were
reviewed for impairment and for fair value;
subsequent to this review, no revaluations
were recorded in 2013–14 as reported values
materially reflected fair values; whereas in the
prior reporting period buildings were re-valued
resulting in a $19.8 million asset revaluation
surplus adjustment.
Balance sheet
Total assets as at 30 June 2014 were
$708 million which is an increase of $5
million on the prior financial year. Property,
plant and equipment increased overall by
$32 million after including investment property
holdings. This relates to an increased capital
investment program of $61 million in fire
stations, fire fighting appliances, equipment
and technology and the completion of the
VEMTC at Craigieburn.

As a consequence of this increased capital
investment, term deposit investments held with
Treasury Corporation Victoria and operating
bank deposits reduced by $30 million to $29
million in 2013–14. The investment portfolio
managed by Victorian Funds Management
Corporation increased due to reinvested
earnings and market valuations by $5 million
to a total investment of $114 million as at
30 June 2014.
Total Liabilities as at 30 June 2014 were
$129 million, an increase of $3 million on the
prior financial year reflecting the increase in
employee leave provisions related to award
salary increases, a marginal increase in leave
entitlement hours and leave accrued pertaining
to the Hazelwood fire.
Net Assets as at 30 June 2014 were $578
million as compared to $576 million as at
30 June 2013 allowing for the comprehensive
result of the $2 million surplus.
Statement of balance sheet ratios
•

Proprietary ratio (total equity to total
assets). As at 30 June 2014 this ratio
is unchanged at 82 per cent (82 per cent
as at 30 June 2013).

•

Debt ratio (total liabilities to total assets). As
at 30 June 2014 this ratio is
unchanged at 18 per cent (18 per cent
as at 30 June 2013).

Pages 40 and 41 inclusive are not part of
the financial statements considered in the
Audit opinion issued by the Victorian AuditorGeneral’s Office.

MFB Annual Report 2013–14 41

COMPREHENSIVE OPERATING STATEMENT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
			
Notes
				

2014
$000

2013
$000

Income from transactions 				
Grants		

2

329,695

–

Contributions 		

2

1,739

309,248

Sales of goods and services		

2

32,041

29,722

Other income 		

2

11,997

13,765

Total income from transactions			

375,472

352,735

				
Expenses from transactions
Employee expenses 		

3

264,027

251,185

Depreciation and amortisation 		

3, 9, 11

22,471

20,189

Other operating expenses 		

3

86,902

80,526

Total expenses from transactions			

373,400

351,900

Net result from transactions (net operating balance)		

2,072

835

				
Other economic flows included in net result				
Net (loss) on non-financial assets 		

4

(439)

(1,422)

Net (loss) on financial instruments 		

4

(187)

(1,030)

Net gain from revaluation of employee leave liabilities

4

601

2,620

Total other economic flows included in net result		

(25)

168

2,047

1,003

Net result		

19

				
Other economic flows – other comprehensive income		
Items that will not be reclassified to net result			
Changes in physical asset revaluation surplus		
19
–
19,826
Total other economic flows – other comprehensive income		
Comprehensive result 			

–

19,826

2,047

20,829

The comprehensive operating statement should be read in conjunction with the notes to the
financial statements included on pages 46 to 94.

42 MFB Annual Report 2013–14

BALANCE SHEET
AS AT 30 JUNE 2014
			
Notes
				

2014
$000

2013
$000

ASSETS
Financial assets 				
Cash and deposits		

12, 20

29,235

9,431

5

7,146

9,785

12

114,014

159,275

Total financial assets			

150,395

178,491

Receivables		
Investment financial assets		

Non-financial assets				
Inventories		

6

879

1,007

Physical assets classified as held for sale 		

7

3,284

3,180

Other non-financial assets		

8

4,111

1,709

Investment property		

10

9,094

–

Property, plant and equipment		

9

529,934

507,576

Intangible assets		

11

10,425

11,150

Total non-financial assets			

557,727

524,622

Total assets			

708,122

703,113

LIABILITIES				
Payables		

13

19,623

20,254

Provisions		

14

107,678

104,020

Other liabilities		

15

2,075

2,140

Total liabilities			

129,376

126,414

Net assets			

578,746

576,699

EQUITY				
Accumulated surplus		

19

234,281

232,234

Physical asset revaluation surplus		

19

222,688

222,688

Contributed capital		

19

121,777

121,777

Net worth			

578,746

576,699

Commitments for expenditure 		

17		

Contingent assets and contingent liabilities		

18		

The balance sheet should be read in conjunction with the notes to the financial statements
included on pages 46 to 94.

MFB Annual Report 2013–14 43

STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Notes
Physical
Accumulated Contributions
Total
		 Asset
Surplus
Capital		
		Revaluation
		Surplus
		
$000
$000
$000
$000

Balance at 1 July 2012		

202,862

231,231

121,777

555,870

Net result for the year		

–

1,003

–

1,003

Other comprehensive income
for the year		

19,826

–

–

19,826

19

222,688

232,234

121,777

576,699

Net result for the year		

–

2,047

–

2,047

Other comprehensive income
for the year		

–

–

–

–

222,688

234,281

121,777

578,746

Balance at 30 June 2013

Balance at 30 June 2014

19

		
The statement of changes in equity should be read in conjunction with the notes to the financial
statements included on pages 46 to 94.

44 MFB Annual Report 2013–14

CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
Notes
			

2014
$000

2013
$000

Cash flows from operating activities			
Receipts			
Receipts from Government			

329,695

37,839

Receipts from other entities			

43,297

305,622

Interest received 			

5,089

7,611

Dividends received 			

2,095

1,662

Goods and services tax recovered from the ATO (i)		

14,901

10,092

Total receipts 			

395,077

362,826

				
Payments			
Payments to suppliers and employees including legislative
payments and tax			

(366,394)

(340,349)

Total payments			

(366,394)

(340,349)

28,683

22,477

Payments for investments			

(10,216)

(38,054)

Proceeds from sale of investments			

55,076

52,789

Purchases of non-financial assets			

(58,466)

(45,575)

Sales of non-financial assets			

4,727

828

Net cash flows from/(used in) investing activities		

(8,879)

(30,012)

19,804

(7,535)

9,431

16,966

29,235

9,431

Net cash flows from/(used in) operating activities

20(b)

				
Cash flows from investing activities

				
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year		
Cash and cash equivalents at end of financial year

20(a)

(i) Goods and Services Tax
received from the ATO is
presented on a net basis.

The cash flow statement should be read in conjunction with the notes to the financial statements
included on pages 46 to 94.

MFB Annual Report 2013–14 45

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Notes to the financial statements

46 MFB Annual Report 2013–14

Note 1.

Summary of significant accounting policies

47

Note 2.

Income from transactions

62

Note 3.

Expenses from transactions

63

Note 4.

Other economic flows included in net result

64

Note 5.

Receivables

64

Note 6.

Inventories

65

Note 7.

Non-financial assets classified as held for sale

66

Note 8.

Other non-financial assets

66

Note 9.

Property, plant and equipment

67

Note 10.

Investment property

72

Note 11.

Intangible assets

73

Note 12.

Financial instruments

74

Note 13.

Payables

82

Note 14.

Provisions

83

Note 15.

Other liabilities

84

Note 16.

Superannuation

84

Note 17.

Commitments for expenditure

85

Note 18.

Contingent assets and contingent liabilities

85

Note 19.

Equity

86

Note 20.

Notes to the cash flow statement

87

Note 21.

Bank overdraft

87

Note 22.

Responsible persons

88

Note 23.

Remuneration of executive officers and payments to other personnel

90

Note 24.

Remuneration of auditors

91

Note 25.

Subsequent events

91

Note 26.

Glossary of terms and style conventions

92

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
These annual financial statements represent
the audited general purpose financial
statements for the Metropolitan Fire and
Emergency Services Board (MFB) for the
period ended 30 June 2014. The purpose of
the report is to provide users with information
about MFB’s stewardship of resources
entrusted to it.
(A) Statement of compliance
These general purpose financial statements
have been prepared in accordance with
the Financial Management Act 1994 (FMA),
applicable Financial Reporting Directions
and Australian Accounting Standards
(AAS), which include Interpretations, issued
by the Australian Accounting Standards
Board (AASB). In particular, they are
presented in a manner consistent with the
requirements of the AASB 1049 Whole
of Government and General Government
Sector Financial Reporting.
Where appropriate, those AAS paragraphs
applicable to not-for-profit entities have
been applied.
Accounting policies are selected and
applied in a manner which ensures that
the resulting financial information satisfies
the concepts of relevance and reliability,
thereby ensuring that the substance of the
underlying transactions or other events is
reported.
To gain a better understanding of the
terminology used in this report a glossary
of terms and style conventions can be
found in Note 26.
These annual financial statements were
authorised for issue by the Board on
12 August 2014.
(B) Basis of accounting preparation and
measurement
The accrual basis of accounting has
been applied in the preparation of these
financial statements whereby assets,
liabilities, equity, income and expenses are
recognised in the reporting period to which
they relate, regardless of when cash is
received or paid.
Judgements, estimates and assumptions
are required to be made about carrying
values of assets and liabilities that are not
readily apparent from other sources. The
estimates and associated assumptions are
based on professional judgements derived
from historical experience and various other
factors that are believed to be reasonable
under the circumstances. Actual results may
differ from these estimates.

Revisions to accounting estimates are
recognised in the period in which the
estimate is revised and also in future
periods that are affected by the revision.
Judgements and assumptions made by
management in the application of AASs
that have significant effects on the financial
statements and estimates which relate to:
• the fair value of land, buildings,
infrastructure, plant and equipment (refer
to Note 1(K))
• superannuation expense (refer to Note
1(G))
• assumptions for employee benefit
provisions based on likely tenure of
existing staff, patterns of leave claims,
future salary movements and future
discount rates (refer to Note 1(L))
• asset useful lives and asset impairment.
These financial statements are presented
in Australian dollars, and prepared in
accordance with the historical cost
convention except for:
• non-financial physical assets which,
subsequent to acquisition, are measured
at a revalued amount being their fair
value at the date of the revaluation
less any subsequent accumulated
depreciation and subsequent impairment
losses. Revaluations are made with
sufficient regularity to ensure that the
carrying amounts do not materially differ
from their fair value
• the fair value of an asset other than land
is generally based on its depreciated
replacement value
• derivative financial instruments, managed
investment schemes, certain debt
securities and investment properties after
initial recognition, which are measured
at fair value with changes reflected in the
comprehensive operating statement (fair
value through profit and loss)
• certain liabilities that are calculated with
regard to actuarial assessments.
Consistent with AASB 13 Fair Value
Measurement, MFB determines the
policies and procedures for both recurring
fair value measurements such as property,
plant and equipment, investment
properties and financial instruments and
for non-recurring fair value measurements
such as non-financial physical assets
held for sale, in accordance with the
requirements of AASB 13 and the relevant
Financial Reporting Directions.

MFB Annual Report 2013–14 47

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorised within the
fair value hierarchy, described as follows,
based on the lowest level input that is
significant to the fair value measurement as
a whole:
• Level 1 – Quoted (unadjusted) market
prices in active markets for identical
assets or liabilities
• Level 2 – Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable
• Level 3 – Valuation techniques for which
the lowest level input that is significant
to the fair value measurement is
unobservable.
For the purpose of fair value disclosures,
MFB has determined classes of assets
and liabilities on the basis of the nature,
characteristics and risks of the asset
or liability and the level of the fair value
hierarchy as explained above.
In addition, MFB determines whether
transfers have occurred between
levels in the hierarchy by re-assessing
categorisation (based on the lowest level
input that is significant to the fair value
measurement as a whole) at the end of
each reporting period.
The Valuer-General Victoria (VGV) is MFB’s
independent valuation agency.
MFB, in conjunction with VGV, monitors
changes in the fair value of each asset and
liability through relevant data sources to
determine whether revaluation is required.
MFB monitors changes in the fair value
of land, including specialised land, by
applying annual VGV indices movements.
The fair value of specialised buildings is
annually monitored using the depreciated
replacement cost method with reference
to current replacement values supplied by
external building cost consultants Westbay
Consulting. The fair value of emergency
response appliance vehicles is monitored
by reference to an external supplier advice
on current replacement costs which
are monitored using the depreciated
replacement cost method.
(C) Reporting entity
The financial statements cover MFB as
an individual reporting entity. MFB is a
statutory authority and operates under the
Metropolitan Fire Brigades Act 1958.

48 MFB Annual Report 2013–14

Its principal address is:
456 Albert Street
East Melbourne VIC 3002
The financial statements include all the
controlled activities of MFB.
Objectives and Funding
The organisation provides comprehensive
fire, rescue and emergency response
services to almost four million residents
within the metropolitan district with the
key objective to reduce the incidence and
impact of fire and other emergencies on
the community.
Prior to 1 July 2013, MFB was significantly
funded through contributions from
insurance companies, municipal councils
and the State Government.
On 1 July 2013, the new Fire Services Levy
was introduced whereby property owners,
including local municipal councils, remit
the levy to the State Revenue Office. The
State Government determine the annual
grant funding for MFB which is detailed in
this report.
Further details of MFB’s operations and
principal activities are included in the report
of operations which does not form part of
these financial statements.
(D) Scope and presentation of financial
statements
Comprehensive operating statement
The comprehensive operating statement
comprises three components, being
‘net result from transactions’ (or termed
as ‘net operating balance’), ‘other
economic flows included in net result’,
as well as ‘other economic flows – other
comprehensive income’. The sum of the
former two, together with the net result
from discontinued operations, represents
the net result.
The net result is equivalent to profit or loss
derived in accordance with AASs.
This classification is consistent with the
whole of government reporting format and
is allowed under AASB 101 Presentation of
Financial Statements.
Balance sheet
Assets and liabilities are presented in
liquidity order with assets aggregated into
financial assets and non-financial assets.
Current and non-current assets and
liabilities (non-current being those assets
or liabilities expected to be recovered or
settled more than 12 months after the
reporting period) are disclosed in the notes,
where relevant.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Cash flow statement
Cash flows are classified according
to whether or not they arise from
operating, investing or financing activities.
This classification is consistent with
requirements under AASB 107 Statement
of Cash Flows.
Statement of changes in equity
The statement of changes in equity
presents reconciliations of non-owner and
owner changes in equity from opening
balances at the beginning of the reporting
period to the closing balances at the end
of the reporting period. It also shows
separately changes due to amounts
recognised in the ‘Comprehensive result’
and amounts related to ‘Transactions with
owner in its capacity as owner’.
Rounding
Amounts in the financial statements
(including the notes) have been rounded
to the nearest thousand dollars, unless
otherwise stated. Figures in the financial
statements may not equate due to
rounding.
(E) Changes in accounting policies
Subsequent to the 2012–13 reporting
period, the following new and revised
Standards have been adopted in the
current period with their financial impact
detailed as below.
AASB 13 Fair Value Measurement
AASB 13 establishes a single source of
guidance for all fair value measurements.
AASB 13 does not change when MFB
is required to use fair value, but rather
provides guidance on how to measure
fair value under Australian Accounting
Standards when fair value is required
or permitted. MFB has considered the
specific requirements relating to highest
and best use, valuation premise, and
principal (or most advantageous) market.
The methods, assumptions, processes and
procedures for determining fair value were
revisited and adjusted where applicable. In
light of AASB 13, MFB has reviewed the
fair value principles as well as its current
valuation methodologies in assessing
the fair value, and the assessment has
not materially changed the fair values
recognised.
However, AASB 13 has predominantly
impacted the disclosures of MFB. It
requires specific disclosures about fair
value measurements and disclosures of
fair values, some of which replace existing
disclosure requirements in other standards,
including AASB 7 Financial Instruments:
Disclosures.

The disclosure requirements of AASB
13 apply prospectively and need not be
applied in comparative information before
first application. Consequently, the 2012–
13 comparatives of these disclosures have
not been provided, except for financial
instruments, of which the fair value
disclosures are required under AASB 7
Financial Instruments: Disclosures.
AASB 119 Employee benefits
In 2013–14, MFB has applied AASB 119
Employee benefits (September 2011, as
amended) and the related consequential
amendments for the first time.
The revised AASB 119 changes the
accounting for defined benefit plans and
termination benefits. The most significant
change relates to the accounting for
changes in defined benefit obligation and
plan assets. As the current accounting
policy is for the Department of Treasury
and Finance to recognise and disclose
the State’s defined benefit liabilities in its
financial statements, changes in defined
benefit obligations and plan assets will
have limited impact on MFB.
The revised standard also changes the
definition of short-term employee benefits.
These were previously benefits that were
expected to be settled within 12 months
after the end of the reporting period in
which the employees render the related
service, however, short-term employee
benefits are now defined as benefits
expected to be settled wholly within 12
months after the end of the reporting
period in which the employees render the
related service.
MFB application of AASB 19 Employee
Benefits in past and the current financial
period has been on the basis of short term
employee benefits being wholly settled
or taken within 12 months from the end
of the reporting period. Accordingly the
revised standard has had no impact on the
measurement or reporting of the annual
and accrued leave provision, subsequently
the prior year (2012–13) did not require
restatement upon release of the revised
standard.
(F) Income from transactions
Income is recognised to the extent that it
is probable that the economic benefits will
flow to the entity and the income can be
reliably measured.
Income recognition
Income is recognised for each of MFB’s
major activities as follows:

MFB Annual Report 2013–14 49

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Grants
Income from grants (other than contribution
by owners) is recognised when MFB
obtains control over the contribution.
For reciprocal grants (ie. equal value is
given back by MFB to the provider), MFB
is deemed to have assumed control
when MFB has satisfied its performance
obligations under the terms of the grant.
For non-reciprocal grants, MFB is deemed
to have assumed control when the grant
is receivable or received. Conditional
grants may be reciprocal or non-reciprocal
depending on the terms of the grant.
Contributions
In the 2012–13 financial year, Statutory
contributions were determined for the
financial year under Section 37 of the
Metropolitan Fire Brigades Act 1958
and comprised one-eighth from the
State Government, one-eighth from the
Municipal Councils whose districts are
within, or partly within, the metropolitan
district and three-quarters from insurance
companies insuring fire risk against
property situated within the metropolitan
district. Contributions income was
recognised in the financial year to which
the determination under Section 37
applies.
Effective 1 July 2013, the Fire Services
Levy was removed from insurance
premiums and is collected through
council rates. Subsequent to 1 July 2013,
metropolitan councils contribute to the Fire
Services Property Levy like other property
owners and the State government will
continue to make a contribution via a grant
from consolidated revenue.
Sale of goods and services
Income from the supply of services
Income from the supply of services is
recognised by reference to the stage
of completion of the services being
performed. The income is recognised
when:

• MFB no longer has any of the significant
risks and rewards of ownership of the
goods transferred to the buyer
• MFB no longer has continuing
managerial involvement to the degree
usually associated with ownership, nor
effective control over the goods sold
• the amount of income and the costs
incurred or to be incurred in respect
of the transactions, can be reliably
measured
• it is probable that the economic benefits
associated with the transaction will flow
to MFB.
Sale of goods and services includes
regulatory fees which are recognised at the
time the regulatory fee is billed.
Other income
Dividend income
Dividend income is recognised when the
right to receive payment is established.
Interest income
Interest includes interest received on bank
deposits, term deposits with Treasury
Corporation Victoria (TCV), and other
investments and the unwinding over time
of the discount on financial assets. Interest
income is recognised using the effective
interest method which allocates the interest
over the relevant period.
Net realised and unrealised gains and
losses on the revaluation of investments do
not form part of income from transactions,
but are reported either as part of income
from other economic flows in the net result
or as unrealised gains or losses taken
directly to equity, forming part of the total
change in net worth in the comprehensive
result.

• it is probable that the economic benefits
associated with the transaction will flow
to MFB.

Sale of real property – land and
buildings
The gross proceeds from the sale of real
property are classified as income at the
date control of the asset passes to the
buyer, usually when an unconditional
contract of sale is signed. The depreciated
cost of the asset is classified as an
expense.

Under the stage of completion method,
income is recognised by reference to
labour hours supplied or to labour hours
supplied as a percentage of total services
to be performed in each annual reporting
period.

Sale of plant and equipment
The gross proceeds of plant and
equipment sales are included as income
at the date control of the asset passes to
the buyer, usually when an unconditional
contract of sale is signed.

• the amount of the income, stage of
completion and transaction costs
incurred can be reliably measured

50 MFB Annual Report 2013–14

Income from sale of goods
Income from the sale of goods is
recognised when:

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
The gain or loss on disposal is calculated
as the difference between the carrying
amount of the asset at the time of disposal
and net proceeds on disposal.
(G) Expenses from transactions
Expenses are recognised as they are
incurred, and reported in the financial year
to which they relate.
Employee expenses
Employee benefits expenses include all costs
related to employment including wages and
salaries, leave entitlements, redundancy
payments, WorkCover premiums and
superannuation contributions.
Employee expenses include
superannuation expenses which are
reported differently depending upon
whether employees are members of
defined benefit or defined contribution
plans. In relation to defined contribution (ie.
accumulation) superannuation plans, the
associated expense is simply the employer
contributions that are paid or payable in
respect of employees who are members
of these plans during the reporting period.
Employer superannuation expenses in
relation to employees who are members of
defined benefit superannuation plans are
described below.
Superannuation – Emergency Services
and State Superannuation defined
benefit plans
The amount recognised in the
comprehensive operating statement
in relation to employer contributions
for members of the defined benefit
superannuation plans is simply the employer
contributions that are paid or payable to
these plans during the reporting period.
The Department of Treasury and Finance
(DTF) in their Annual Financial Statements
disclose on behalf of the State as the
sponsoring employer, the net defined
benefit cost related to the members of
these plans as an administered liability.
Refer to DTF’s Annual Financial Statements
for more detailed disclosures in relation to
these plans.
Depreciation and amortisation
All buildings, plant and equipment and
other non-financial physical assets
(excluding items under operating leases,
assets held for sale, land and investment
properties) that have finite useful lives are
depreciated. Depreciation is generally
calculated on a straight-line basis, at rates
that allocate the asset’s value, less any
estimated residual value, over its estimated
useful life.

Leasehold improvements are depreciated
over the period of the lease or estimated
useful life, whichever is the shorter,
using the straight line method. The
estimated useful lives, residual values and
depreciation method are reviewed at the
end of each annual reporting period and
adjustments made where appropriate.
The following estimated useful lives are
used in the calculation of depreciation for
the current and prior year:
2014
Buildings

40 years

VEMTC training props
Plant and equipment

20 years
3 – 15 years

Land has an indefinite life and is not
depreciated. Depreciation is not recognised
in respect of this asset as its service
potential has not, in any material sense,
been consumed during the reporting
period.
Intangible produced assets with finite
useful lives are amortised as an expense
from transactions on a straight-line basis
over the asset’s useful life. Amortisation
begins when the asset is available for
use, that is, when it is in the location and
condition necessary for it to be capable
of operating in the manner intended by
management.
The average lives and remaining lives on
intangible assets are:
		

2014

2013

Average
Life

Remaining
Life

Remaining
Life

Optic fibre
licence
agreements: 15 years

6 years

7 years

Software:

5–7 years

1–5 years 1–6 years

On the other hand, the consumption
of intangible non-produced assets
with finite useful lives is not classified
as a transaction, but as amortisation.
Consequently, the amortisation is included
as an other economic flow in the net
result. The intangible assets held at period
close are classified as produced assets,
accordingly the amortisation is classified as
a transaction.
Intangible assets with indefinite useful lives
are not amortised, but are tested annually
for impairment.

MFB Annual Report 2013–14 51

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Reclassification of amortisation to
other economic flows in 2012–13
In the prior reporting period financial
statements (2012–13), the amortisation of
intangible non-produced assets relating to
the optic fibre licence agreements totalling
$816,000 was inadvertently treated as
amortisation expense, instead of other
economic flows expense (as per AASB 138
Intangible Assets). This has subsequently
been adjusted in these accounts for the
prior year (2012–13), the impact for the
2012–13 reporting period:
• amortisation expense reduced by
$816,000
• other economic flows – net loss on nonfinancial assets increased by $816,000.
Other operating expenses
Other operating expenses generally
represent the day to day running costs
incurred in normal operations and include:
Supplies and services
Supplies and services costs are recognised
as an expense in the reporting period
in which they are incurred. The carrying
amounts of any inventories held for
distribution are expensed when distributed.

Amortisation of non-produced
intangible assets
Intangible non-produced assets with finite
lives are amortised as an other economic
flow on a systematic (typically straightline) basis over the asset’s useful life.
Amortisation begins when the asset is
available for use, that is, when it is in the
location and condition necessary for it to
be capable of operating in the manner
intended by management.
Impairment of non-financial assets
Intangible assets with indefinite useful lives
(and intangible assets not yet available for
use) are tested annually for impairment (as
described below) and whenever there is an
indication that the asset may be impaired.
All other assets are assessed annually for
indications of impairment, except for:
• inventories (refer Note 1(K))

Bad and doubtful debts
Refer to Note 1(J) Impairment of financial
assets.

• non-financial physical assets held for
sale (refer Note 1(K))

Maintenance and repairs
Major plant and equipment is required
to be serviced on a regular basis. This
is managed as part of an ongoing
major cyclical maintenance program.
Maintenance costs are charged as
expenses as incurred, except where
they relate to the replacement of a major
component of an asset, in which case the
costs are capitalised and depreciated.
Other routine operating maintenance,
repair costs and minor plant renewals are
also charged as expenses as incurred.

If there is an indication of impairment,
the assets concerned are tested as to
whether their carrying value exceeds their
recoverable amount. Where an asset’s
carrying value exceeds its recoverable
amount, the difference is written off as
an other economic flow, except to the
extent that the write-down can be debited
to an asset revaluation surplus amount
applicable to that class of asset.

(H) Other economic flows included in the
net result
Other economic flows measure the change
in volume or value of assets or liabilities
that do not result from transactions.
Net gain/(loss) on non-financial assets
Net gain/(loss) on non-financial assets and
liabilities includes realised and unrealised
gains and losses as follows:
Revaluation gains/(losses) of nonfinancial physical assets
Refer to Note 1(K) Revaluations of nonfinancial physical assets.

52 MFB Annual Report 2013–14

Net gain/(loss) on disposal of nonfinancial assets
Any gain or loss on the disposal of nonfinancial assets is recognised at the date of
disposal and is determined after deducting
from the proceeds the carrying value of the
asset at that time.

• financial assets (refer Note 1(J)).

If there is an indication that there has
been a change in the estimate of an
asset’s recoverable amount since the
last impairment loss was recognised, the
carrying amount shall be increased to its
recoverable amount. This reversal of the
impairment loss occurs only to the extent
that the asset’s carrying amount does not
exceed the carrying amount that would
have been determined, net of depreciation
or amortisation, if no impairment loss had
been recognised in prior years.
It is deemed that, in the event of the loss
or destruction of an asset, the future
economic benefits arising from the use of
the asset will be replaced unless a specific
decision to the contrary has been made.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
The recoverable amount for most assets
is measured at the higher of depreciated
replacement cost and fair value less costs
to sell. Recoverable amount for assets
held primarily to generate net cash inflows
is measured at the higher of the present
value of future cash flows expected to be
obtained from the asset and fair value less
costs to sell.
Net gain/(loss) on financial instruments
Net gain/(loss) on financial instruments
includes:
• realised and unrealised gains and losses
from revaluations of financial instruments
at fair value
• impairment and reversal of impairment
for financial instruments at amortised
cost; (refer Note 1(J))
• disposal of financial assets and
derecognition of financial liabilities.
Revaluations of financial instruments
at fair value
Refer to Note 1(I) Financial Instruments.
Other gains/(losses) from other
economic flows
Other gains/(losses) from other economic
flows include the gains or losses from:
• the revaluation of the present value of the
leave liability due to changes in the bond
interest rates
• transfer of amounts from the reserves
to accumulated surplus or net result
due to disposal or de-recognition or
reclassification.
(I) Financial instruments
Financial instruments arise out of
contractual agreements that give rise
to a financial asset of one entity and a
financial liability or equity instrument of
another entity. Due to the nature of MFB’s
activities, certain financial assets and
financial liabilities arise under statute rather
than a contract. Such financial assets
and financial liabilities do not meet the
definition of financial instruments in AASB
132 Financial Instruments: Presentation.
For example, statutory receivables arising
from taxes, fines and penalties do not meet
the definition of financial instruments as
they do not arise under contract. However,
guarantees issued by the Treasurer on
behalf of MFB are financial instruments
because, although authorised under
statute, the terms and conditions for each
financial guarantee may vary and are
subject to an agreement.

Investments are recognised and
derecognised on trade date where
purchase or sale of an investment is under
a contract whose terms require delivery
of the investment within the timeframe
established by the market concerned and
are initially measured at fair value net of
transaction costs.
The classification of financial instruments
depends on the purpose for which the
investments were acquired. Management
determines the classification of its
investments at initial recognition.
Where relevant, for note disclosure
purposes, a distinction is made between
those financial assets and financial
liabilities that meet the definition of financial
instruments in accordance with AASB 132
and those that do not.
The following refers to financial instruments
unless otherwise stated.
Loans and receivables
Loans and receivables are financial
instrument assets with fixed and
determinable payments that are not quoted
on an active market. These assets are
initially recognised at fair value plus any
directly attributable transaction costs.
Subsequent to initial measurement, loans
and receivables are measured at amortised
cost using the effective interest method,
less any impairment.
Loans and receivables category includes
cash and deposits (refer to Note 1(J)), term
deposits with maturity greater than three
months, trade receivables, loans and other
receivables, but not statutory receivables.
Held-to-maturity financial assets
If MFB has the positive intent and ability to
hold nominated investments to maturity,
then such financial assets may be classified
as held-to-maturity. Held-to-maturity
financial assets are recognised initially
at fair value plus any directly attributable
transaction costs. Subsequent to initial
recognition held-to-maturity financial assets
are measured at amortised cost using
the effective interest method, less any
impairment losses.
The held-to-maturity category includes
certain term deposits and debt securities
for which MFB intends to hold to maturity.
Held-to-maturity financial assets relate to
investments which MFB have the intention
to hold to maturity.

MFB Annual Report 2013–14 53

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
AASBs require specific treatment should
MFB reclassify more than an insignificant
amount of held-to-maturity investments not
close to their maturity which would result
in the whole category being reclassified
as available-for-sale. MFB would also be
prevented from classifying investment
securities as held-to-maturity for the
current and the following two financial
years.
Financial assets and liabilities at fair
value through profit or loss
Financial assets are categorised as fair value
through profit or loss at trade date if they are
classified as held for trading or designated
as such upon initial recognition. Financial
instrument assets are designated at fair
value through profit or loss on the basis that
the financial assets form part of a group
of financial assets that are managed by
Victorian Funds Management Corporation
(VFMC) for MFB based on their fair values
and have their performance evaluated
in accordance with documented risk
management and investment strategies.
Financial instruments at fair value through
profit or loss are initially measured at fair
value and attributable transaction costs
are expensed as incurred. Subsequently,
any changes in fair value are recognised
in the net result as other economic flows.
Any dividend or interest on a financial
asset is recognised in the net result from
transactions.
MFB uses VFMC as the finance manager
of its investment portfolio. VFMC adopts a
centralised asset management approach
to develop individual investment strategies
to maximise the probability of meeting
MFB’s individual risk profile and investment
objectives.
Financial liabilities at amortised cost
Financial instrument liabilities are initially
recognised on the date they are originated.
They are initially measured at fair value
plus any directly attributable transaction
costs. Subsequent to initial recognition,
these financial instruments are measured
at amortised cost with any difference
between the initial recognised amount and
the redemption value being recognised
in profit and loss over the period of the
interest-bearing liability using the effective
interest rate method (refer to Note 26).
Financial instrument liabilities measured
at amortised cost include all of MFB
contractual payables, deposits held and
advances received and interest-bearing
arrangements other than those designated
at fair value through profit or loss.

54 MFB Annual Report 2013–14

Offsetting financial instruments
Financial instrument assets and liabilities
are offset and the net amount presented in
the consolidated balance sheet when and
only when, MFB has a legal right to offset
the amounts and intends either to settle on
a net basis or to realise the asset and settle
the liability simultaneously.
(J) Financial assets
Cash and deposits
Cash and deposits, including cash
equivalents, comprise cash on hand and
cash at bank, deposits at call and those
highly liquid investments with an original
maturity of three months or less, which
are held for the purpose of meeting short
term cash commitments rather than for
investment purposes and which are readily
convertible to known amounts of cash
and are subject to an insignificant risk of
changes in value.
Receivables
Receivables consist of:
• contractual receivables, such as debtors
in relation to goods and services and
accrued investment income
• statutory receivables, such as amounts
owing from the Victorian Government
and Goods and Services Tax (GST) input
tax credits recoverable.
Contractual receivables are classified as
financial instruments and categorised
as loans and receivables (refer to Note
1(I) Financial Instruments for recognition
and measurement). Statutory receivables
are recognised and measured similarly
to contractual receivables (except for
impairment), but are not classified as
financial instruments because they do not
arise from a contract.
Receivables are recognised at fair value
and less an allowance for impairment.
Receivables are subject to impairment
testing as described below. A provision for
doubtful receivables is recognised when
there is objective evidence that the debts
may not be collected, and bad debts are
written off when identified.
Investment and other financial assets
Investments are classified in the following
categories:
• financial assets at fair value through profit
or loss
• loans and receivables
• held-to-maturity.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
The classification depends on the purpose
for which the investments were acquired.
Management determines the classification
of its investments at initial recognition.
Any dividend or interest earned on
the financial asset is recognised in the
comprehensive operating statement as a
transaction.
Derecognition of financial assets
A financial asset (or, where applicable, a
part of a financial asset or part of a group
of similar financial assets) is derecognised
when:
• the rights to receive cash flows from the
asset have expired; or
• MFB retains the right to receive cash
flows from the asset, but has assumed
an obligation to pay them in full without
material delay to a third party under a
‘pass through’ arrangement; or
• MFB has transferred its rights
to receive cash flows from the asset
and either:
(a) has transferred substantially all the
risks and rewards of the asset; or
(b) has neither transferred nor retained
substantially all the risks and rewards
of the asset, but has transferred
control of the asset.
Where MFB has neither transferred nor
retained substantially all the risks and
rewards of transferred control, the asset
is recognised to the extent of MFB’s
continuing involvement in the asset.
Impairment of financial assets
At the end of each reporting period,
MFB assesses whether there is objective
evidence that a financial asset or group
of financial assets is impaired. All financial
instrument assets, except those measured
at fair value through profit or loss, are
subject to annual review for impairment.
Receivables are assessed for bad and
doubtful debts on a regular basis. Those
bad debts considered as written off
by mutual consent are classified as a
transaction expense. Bad debts not written
off by mutual consent and the allowance
for doubtful receivables are classified as
other economic flows in the net result.
The amount of the allowance is the
difference between the financial asset’s
carrying amount and the present value of
estimated future cash flows, discounted at
the effective interest rate.

In assessing impairment of statutory
(non-contractual) financial assets, which
are not financial instruments, professional
judgement is applied in assessing
materiality using estimates, averages
and other computational methods in
accordance with AASB 136 Impairment
of Assets.
(K) Non-financial assets
Inventories
Inventories include goods and other
property held either for sale or for
distribution at zero or nominal cost, or for
consumption in the ordinary course of
business operations.
Inventories held for distribution are
measured at cost, adjusted for any loss
of service potential. All other inventories,
including land held for sale, are measured
at the lower of cost and net realisable
value. Where inventories are acquired for
no cost or nominal consideration, they are
measured at current replacement cost at
the date of acquisition.
Cost, includes an appropriate portion of
fixed and variable overhead expenses.
Cost is assigned to land held for sale
(undeveloped, under development and
developed) and to other high value, low
volume inventory items on a specific
identification of cost basis. Cost for all
other inventory is measured on the basis
of weighted average cost.
Non-financial physical assets
classified as held for sale
Prepayments
Other non-financial assets include
prepayments which represent payments
in advance of receipt of goods or services
or that part of expenditure made in
one accounting period covering a term
extending beyond that period.
Non-financial physical assets are treated
as current and classified as held for sale
if their carrying amount will be recovered
through a sale transaction rather than
through continuing use.
This condition is regarded as met only
when:
• the asset is available for immediate use
in the current condition; and
• the sale is highly probable and the
asset’s sale is expected to be completed
in 12 months from the date of
classification.

MFB Annual Report 2013–14 55

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
These non-financial physical assets, related
liabilities and financial assets are measured
at the lower of carrying amount and fair
value less costs to sell, and are not subject
to depreciation or amortisation.
Property, plant and equipment
All non-financial physical assets are
measured initially at cost and subsequently
revalued at fair value less accumulated
depreciation and impairment.
Where an asset is received for no or
nominal cost, the cost is its fair value at the
date of acquisition.
Non-financial physical assets such as land
and heritage assets are measured at fair
value with regard to the property’s highest
and best use after due consideration
is made for any legal or physical
restrictions imposed on the asset, public
announcements or commitments made in
relation to the intended use of the asset.
Theoretical opportunities that may be
available in relation to the asset are not
taken into account until it is virtually certain
that the restrictions will no longer apply.
Therefore, unless otherwise disclosed, the
current use of these non-financial physical
assets will be their highest and best uses.
The fair value of plant, equipment and
appliance vehicles is normally determined
by reference to the asset’s depreciated
replacement cost. For plant, equipment
and passenger vehicles, existing
depreciated historical cost is generally
a reasonable proxy for depreciated
replacement cost because of the short
lives of the assets concerned.
The cost of constructed non-financial
physical assets includes the cost of all
materials used in construction, direct
labour on the project and an appropriate
proportion of variable and fixed overheads.
For the accounting policy on impairment
of non-financial physical assets, refer to
impairment of non-financial assets under
Note 1(H) Impairment of non-financial
assets.
Leasehold improvements
The cost of leasehold improvements is
capitalised as an asset and depreciated
over the shorter of the remaining term of
the lease or the estimated useful life of the
improvements.
Revaluations of non-financial
physical assets
Non-financial physical assets are measured
at fair value on a cyclical basis, in
accordance with the Financial Reporting
Directions (FRDs) issued by the Minister for
Finance.
56 MFB Annual Report 2013–14

A full revaluation normally occurs every five
years, based upon the asset’s government
purpose classification but may occur more
frequently if fair value assessments indicate
material changes in values. Independent
valuers are generally used to conduct
these scheduled revaluations. Any interim
revaluations are determined in accordance
with the requirements of the FRDs.
Revaluation increases or decreases arise
from differences between an asset’s
carrying value and fair value.
Net revaluation increases (where the
carrying amount of a class of assets is
increased as a result of a revaluation)
are recognised in ‘Other economic flows
– other comprehensive income’ and
accumulated in equity under the asset
revaluation surplus. However, the net
revaluation increase is recognised in the
net result to the extent that it reverses a net
revaluation decrease in respect of the same
class of property, plant and equipment
previously recognised as an expense (other
economic flows) in the net result.
Net revaluation decrease is recognised
in ‘Other economic flows – other
comprehensive income’ to the extent
that a credit balance exists in the asset
revaluation surplus in respect of the same
class of property, plant and equipment.
Otherwise, the net revaluation decreases
are recognised immediately as other
economic flows in the net result. The net
revaluation decrease recognised in ‘Other
economic flows – other comprehensive
income’ reduces the amount accumulated
in equity under asset revaluation surplus.
Revaluation increases and decreases
relating to individual assets in a class of
property, plant and equipment, are offset
against one another in that class but are
not offset in respect of assets in different
classes. Any asset revaluation surplus is
not normally transferred to accumulated
funds on de-recognition of the relevant
asset.
Investment properties
Investment properties represent
properties held to earn rentals or for
capital appreciation, or both. Investment
properties exclude properties held to meet
service delivery objectives of MFB.
Investment properties are initially measured
at cost. Costs incurred subsequent to
initial acquisition are capitalised when it
is probable that future economic benefits
in excess of the originally assessed
performance of the asset will flow to MFB.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Subject to initial recognition at cost,
investment properties are revalued to
fair value with changes in the fair value
recognised as other economic flows in
the comprehensive operating statement
in the period that they arise. Fair values
are determined based on a market
comparable approach that reflects recent
transaction prices for similar properties.
These properties are neither depreciated
nor tested for impairment.

• contractual payables, such as accounts
payable. Accounts payable represent
liabilities for goods and services provided
to MFB prior to the end of the financial
year that are unpaid and arise when
MFB becomes obliged to make future
payments in respect of the purchase of
those goods and services

Rental income from the leasing of
investment properties is recognised in the
comprehensive operating statement on a
straight-line basis over the least term.

Contractual payables are classified as
financial instruments and categorised
as financial liabilities at amortised cost
(refer Note 1(I)). Statutory payables are
recognised and measured similarly to
contractual payables, but are not classified
as financial instruments and not included
in the category of financial liabilities at
amortised cost, because they do not arise
from a contract.

Intangible assets
Intangible assets are initially measured
at cost. Subsequently, intangible assets
with finite useful lives are carried at cost
less accumulated amortisation and
accumulated impairment losses. Costs
incurred subsequent to initial acquisition
are capitalised when it is expected that
additional future economic benefits will flow
to MFB.
When the recognition criteria in AASB
138 Intangible Assets are met, internally
generated intangible assets are recognised
and measured at cost less accumulated
amortisation and impairment.
An internally-generated intangible asset
arising from development (or from the
development phase of an internal project)
is recognised if, and only if, all of the
following are demonstrated:
(a) the technical feasibility of completing
the intangible asset so that it will be
available for use or sale
(b) an intention to complete the intangible
asset and use or sell it
(c) the ability to use or sell the intangible
asset
(d) the intangible asset will generate
probable future economic benefits
(e) the availability of adequate technical,
financial and other resources to
complete the development and to use
or see the intangible asset
(f) the ability to measure reliably the
expenditure attributable to the
intangible asset during its development.
Refer Note 1(G) Depreciation and
amortisation and Note 1(H) Impairment of
non-financial assets.
(L) Liabilities
Payables
Payables consist of:

• statutory payables, such as goods and
services tax and fringe benefits tax
payables.

Other liabilities
At reporting date, other liabilities pertain
to income received in advance for
prepaid future access by the Country
Fire Authority (CFA) to MFB’s optical fibre
communications network.
Provisions
Provisions are recognised when MFB has
a present obligation, the future sacrifice
of economic benefits is probable and the
amount of the provision can be measured
reliably.
The amount recognised as a provision
is the best estimate of the consideration
required to settle the present obligation at
reporting period, taking into account the
risks and uncertainties surrounding the
obligation. Where a provision is measured
using the cash flows estimated to settle
the present obligation, the carrying amount
is the present value of those cash flows,
using discount rate that reflects the time
value of money and risks specific to the
provision.
Employee benefits
Provision is made for benefits accruing
to employees in respect of wages and
salaries, annual leave, accrued leave and
long service leave for services rendered to
the reporting date.
Wages and salaries and annual leave
Liabilities for wages and salaries, including
non-monetary benefits annual leave are
recognised in the provision for employee
benefits, as ‘current liabilities’, because
MFB does not have an unconditional right
to defer settlements of these liabilities.

MFB Annual Report 2013–14 57

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Depending on the expectation of the timing
of settlement, liabilities for wages and
salaries and annual leave are measured at:
• undiscounted value – if MFB expects to
wholly settle within 12 months; or
• present value – if MFB does not expect
to wholly settle within 12 months.
Accrued leave
Accrued leave is an employee leave benefit
provided to operational staff when certain
conditions are met under the Enterprise
Agreement. This is recognised in the
provision for employee benefits.
Long service leave
Liability for long service leave (LSL) is
recognised in the provision for employee
benefits.
Unconditional LSL is disclosed in the notes
to the financial statements as a current
liability even where MFB does not expect
to settle the liability within 12 months
because it will not have the unconditional
right to defer the settlement of the
entitlement should an employee take leave
within 12 months.
The components of the current LSL liability
are measured at:
• undiscounted value – if MFB expects to
wholly settle within 12 months; and
• present value – if MFB does not expect
to wholly settle within 12 months.
Conditional LSL is disclosed as a noncurrent liability. There is an unconditional
right to defer the settlement of the
entitlement until the employee has
completed the requisite years of service.
This non-current LSL liability is measured
at present value.
Any gain or loss following revaluation of the
present value of non-current LSL liability
is recognised as a transaction, except to
the extent that a gain or loss arises due to
changes in bond interest rates for which it
is then recognised as an other economic
flow (refer to Note 1(H)).
Termination benefits
Termination benefits are payable when
employment is terminated before the
normal retirement date, or when an
employee decides to accept voluntary
redundancy in exchange for these benefits.
MFB recognises termination benefits when
it is demonstrably committed to either
terminating the employment of current
employees according to a detailed formal
plan without possibility of withdrawal or
providing termination benefits as a result
of an offer made to encourage voluntary
redundancy. Benefits falling due more than
58 MFB Annual Report 2013–14

12 months after the end of the reporting
period are discounted to present value.
Bonus plans
A liability for bonus plans is recognised
in payables when there is no realistic
alternative but to settle the liability and at
least one of the following conditions is met:
• there are formal terms for determining
the amount of the benefit
• the amounts to be paid are determined
before the time of completion of the
financial statements
• past practice provides clear evidence of
the amount of the obligation.
Liabilities for bonus plans are expected
to be settled within 12 months and are
measured at the amount expected to be
paid when they are settled.
Employee benefits on-costs
Employee benefits on-costs such as
payroll tax, workers compensation and
superannuation are recognised separately
from the provision for employee benefits.
Employee benefit provisions
Employee benefit provisions expected to
be settled beyond 12 months have been
apportioned on the basis of expected
settlement periods in the future and
adjusted to account for wage increases
and discounted to present value. The
average wage inflation factor applied
on annual leave is 4.44 per cent (2013:
4.50 per cent) and 4.44 per cent on long
service leave which also covers seniority,
promotion and other relevant factors
(2013: 4.50 per cent). The average end of
year discount rate applied was 3.57 per
cent (2013: 3.79 per cent). Discount rates
are supplied by the Department of Treasury
and Finance. Long service leave has been
applied over 12 years when calculating the
present value, as this reflects the current
circumstances of 9.00 per cent of leave
taken per annum.
(M) Leases
Operating leases – MFB as lessee
A lease is a right to use an asset for an
agreed period of time in exchange for
payment.
Operating lease payments, including any
contingent rentals, are recognised as an
expense in the comprehensive operating
statement on a straight-line basis over
the lease term, except where another
systematic basis is more representative
of the time pattern of the benefits derived
from the use of the leased asset. The
leased asset is not recognised in the
balance sheet.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
All incentives for the agreement of a new
or renewed operating lease are recognised
as an integral part of the net consideration
agreed for the use of the leased asset,
irrespective of the incentive’s nature or form
or the timing of payments.
In the event that lease incentives are
received to enter into operating leases,
the aggregate cost of incentives are
recognised as a reduction of rental
expense over the lease term on a straightline basis, unless another systematic basis
is more representative of the time pattern
in which economic benefits from the leased
asset are consumed.
Operating leases – MFB as lessor
Rental income from operating leases is
recognised on a straight-line basis over the
term of the relevant lease.
(N) Equity
Contributions by owner
Additions to net assets which have been
designated as contributions by owners
are recognised as contributed capital.
Other transfers that are in the nature of
contributions or distributions have also
been designated as contributions by
owners.
Transfers of net assets arising from
administrative restructurings are treated as
distributions to or contributions by owners.
Transfers of net liabilities arising from
administrative restructurings are treated as
distribution to owners.
(O) Commitments
Commitments for future expenditure
include operating and capital commitments
arising from contracts. These commitments
are disclosed by way of a note (refer to
Note 17 Commitments for expenditure)
at their nominal value and inclusive of
the GST payable. In addition, where it
is considered appropriate and provides
additional relevant information to users, the
net present values of significant individual
commitments are referenced in the notes.
These future expenditures cease to be
disclosed as commitments once the
related liabilities are recognised in the
balance sheet.

(Q) Accounting for the goods and
services tax (GST)
Income, expenses and assets are
recognised net of the amount of associated
GST, except where GST incurred is not
recoverable from the taxation authority. In
this case, the GST payable is recognised
as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated
inclusive of the amount of GST receivable
or payable. The net amount of GST
recoverable from, or payable to, the
taxation authority is included with other
receivables or payables in the balance
sheet.
Cash flows are presented on a gross
basis. The GST components of cash flows
arising from investing or financing activities
which are recoverable from, or payable
to the taxation authority, are presented as
operating cash flow.
Commitments and contingent assets and
liabilities are also stated inclusive of GST
(refer to Note 1(O) and Note 1(P)).
(R) Events after reporting period
Assets, liabilities, income or expenses
arise from past transactions or other
past events. Where the transactions
result from an agreement between MFB
and other parties, the transactions are
only recognised when the agreement is
irrevocable at or before the end of the
reporting period. Adjustments are made
to amounts recognised in the financial
statements for events which occur after
the reporting period and before the date
the financial statements are authorised
for issue, where those events provide
information about conditions which existed
in the reporting period. Note disclosure
is made about events between the
reporting period and the date the financial
statements are authorised for issue where
the events relate to conditions which arose
after the end of the reporting period that
are considered to be of material interest.

(P) Contingent assets and contingent
liabilities
Contingent assets and contingent liabilities
are not recognised in the balance sheet,
but are disclosed by way of a note (refer to
Note 18 Contingent assets and contingent
liabilities) and, if quantifiable, are measured
at nominal value. Contingent assets and
liabilities are presented inclusive of GST
receivable or payable respectively.
MFB Annual Report 2013–14 59

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(S) Australian accounting standards issued that are not yet effective (AASs)
Certain new AASs have been published that are not mandatory for the 30 June 2014 reporting
period. The Department of Treasury and Finance assesses the impact of these new standards
and advises MFB of their applicability and early adoption where applicable. As at 30 June
2014, the following AASs have been issued by the AASB but not yet effective. They become
effective for the first financial statements for reporting periods commencing after the stated
operative dates as follows:
Standard/
Interpretation

Summary

Applicable
for reporting
periods
beginning on

Impact on MFB financial
statements

AASB 9 Financial
instruments

This Standard simplifies
requirements for the classification
and measurement of financial
assets resulting from Phase 1
of the IASB’s project to replace
IAS 39 Financial Instruments:
Recognition and Measurement
(AASB 139 Financial Instruments:
Recognition and Measurement).

1 Jan 2017

The preliminary assessment
has identified that the
financial impact of available
for sale (AFS) assets will
now be reported through
other comprehensive
income (OCI) and no longer
recycled to the profit and
loss.
While the preliminary
assessment has not
identified any material
impact arising from AASB
9, it will continue to be
monitored and assessed.

AASB 10
Consolidated
Financial
Statements

This Standard forms the basis for
determining which entities should
be consolidated into an entity’s
financial statements. AASB 10
defines ‘control’ as requiring
exposure or rights to variable
returns and the ability to affect
those returns through power over
an investee, which may broaden
the concept of control for public
sector entities.

1 Jan 2014
(not-for-profit
entities)

For MFB, AASB 10 builds
on the control guidance
that existed in AASB 127
and Interpretation 112 and
is not expected to change
which entities need to be
consolidated.
Ongoing work is being done
to monitor and assess the
impact of this standard.

The AASB has issued an
Australian Implementation
Guidance for Not-for-Profit
Entities – Control and Structured
Entities that explains and
illustrates how the principles
in the Standard apply from the
perspective of not-for-profit
entities in the private and public
sectors.
AASB 11 Joint
Arrangements

60 MFB Annual Report 2013–14

This Standard deals with the
concept of joint control, and
sets out a new principles-based
approach for determining the
type of joint arrangement that
exists and the corresponding
accounting treatment. The new
categories of joint arrangements
under AASB 11 are more
aligned to the actual rights and
obligations of the parties to the
arrangement.

1 Jan 2014
(not-for-profit
entities)

Based on current
assessment, entities already
apply the equity method
when accounting for joint
ventures. It is anticipated
that there would be no
material impact.
Ongoing work is being done
to monitor and assess the
impact of this standard.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Standard/
Interpretation

Summary

Applicable
for reporting
periods
beginning on

Impact on MFB financial
statements

AASB 12
Disclosure of
Interests in Other
Entities

This Standard requires disclosure
of information that enables
users of financial statements
to evaluate the nature of,
and risks associated with,
interests in other entities and
the effects of those interests on
the financial statements. This
Standard replaces the disclosure
requirements of AASB 127
Separate Financial Statements
and AASB 131 Interests in Joint
Ventures.

1 Jan 2014

The new standard is
likely to require additional
disclosures and ongoing
work is being done to
determine the extent
of additional disclosure
required.

AASB 127
Separate Financial
Statements

This revised Standard prescribes
the accounting and disclosure
requirements for investments
in subsidiaries, joint ventures
and associates when an entity
prepares separate financial
statements.

1 Jan 2014

AASB 128
Investments in
Associates and
Joint Ventures

This revised Standard sets
out the requirements for the
application of the equity method
when accounting for investments
in associates and joint ventures.

1 Jan 2014

AASB 1055
Budgetary
Reporting

AASB 1055 extends the scope
of budgetary reporting that is
currently applicable for the whole
of government and general
government sector (GGS) to
NFP entities within the GGS,
provided that these entities
present separate budget to the
parliament.

1 July 2014

(not-for-profit
entities)

(not-for-profit
entities)

(not-for-profit
entities)

Current assessment
indicates that there is limited
impact on MFB. Ongoing
work is being done to
monitor and assess the
impact of this standard.

Current assessment
indicates that there is limited
impact on MFB. Ongoing
work is being done to
monitor and assess the
impact of this standard.
MFB will be required to
restate in the financial
statements the budgetary
information in accordance
with the presentation format
prescribed in Australian
Accounting Standards
and explain the significant
variances from the original
budget.

MFB Annual Report 2013–14 61

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
2014
$000

2013
$000

2. INCOME FROM TRANSACTIONS
(a) Grants		
Department of Justice – Grants

317,093

–

Treasurer’s advance (i)

12,602

–

Total contributions

329,695

–

(b) Contributions		
Insurance companies

–

227,033

Municipalities

–

37,839

Department of Justice – Contributions

–

37,839

1,739

5,399

–

1,138

1,739

309,248

Brokers and owners (ii)
Commonwealth Government
Total contributions

(c) Sales of goods and services		
False alarm charges
Fire suppression equipment sales and servicing
Other sales
Total sales of goods and services

6,509

5,669

18,400

16,869

7,132

7,184

32,041

29,722

(d) Other Income		

Interest		
Interest on bank deposits

487

571

Interest – held to maturity investments

1,362

2,952

Interest – held for trading investments

3,046

3,603

Total interest

4,895

7,126

Dividends		

(i) The Treasurer’s Advance received via
the Department of Justice is the State
Government’s reimbursement of costs
incurred in assisting regional fire strike
teams including the Hazelwood coal
seam fire.
(ii) The Brokers and Owners contributions
in 2014 are the residual contributions
pertaining to the 2012/13 financial
year. Subsequent to the Fire Services
Levy introduced 1 July 2013, there
will be no further brokers and owners
contributions in future financial years.

62 MFB Annual Report 2013–14

Dividends – held for trading investments

2,095

1,662

Total dividends

2,095

1,662

Income – sundry 		
Workers’ compensation recovered

2,978

1,996

506

472

8

830

Other

1,515

1,679

Total income – sundry

5,007

4,977

11,997

13,765

375,472

352,735

Property rental
Contribution penalties

Total other income
Total income from transactions

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
2014
$000

2013
$000

3. EXPENSES FROM TRANSACTIONS
(a) Employee expenses		
Salaries (i)

199,562

191,512

Overtime (i)

18,952

15,167

5,632

6,124

16,463

15,925

1,174

1,223

11,582

10,977

Workers’ compensation

9,600

9,099

Fringe benefits tax

1,062

1,158

264,027

251,185

Movement in employee benefit provisions
(excluding impact of present value discount rate changes)
Superannuation – defined benefit fund
Superannuation – defined contribution fund
Payroll tax

Total employee expenses

(b) Depreciation and amortisation		
Buildings

10,114

7,918

Plant and equipment

11,057

11,211

Amortisation of intangible assets
Total depreciation and amortisation

1,300

1,060

22,471

20,189

(c) Other operating expenses		
Contract services – other (ii)

18,938

15,931

Contract services – government

18,921

18,304

Property utilities, rates and maintenance

11,170

7,465

Supplies and consumables

3,610

4,318

Motor vehicle maintenance and fuel

4,545

4,020

Plant and equipment maintenance

4,730

5,369

Information technology

3,426

3,811

Uniforms

3,658

3,824

Travel

2,725

2,930

Training and development

3,011

3,384

Communications

1,750

1,895

Legal

4,313

3,957

Insurance

1,013

1,054

81

122

Internal audit and compliance audits

328

381

Consultants

874

303

1,237

1,024

487

536

Advertising and promotion

Property lease
Cost of goods sold
Other
Total other operating expenses
Total expenses from transactions

2,085

1,898

86,902

80,526

373,400

352,716

(i) Salaries and overtime in 2013–14
incorporate $6.7 million additional
overtime incurred as part of the
MFB response to the Hazelwood
coal seam fire and regional fires
outside of the metropolitan district.
(ii) Contract services – other costs
include the significant unplanned
expenditure (approximately $4.7
million on asbestos control,
removal and remediation at
the Eastern Hill and Thornbury
locations).

MFB Annual Report 2013–14 63

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

4. OTHER ECONOMIC FLOWS INCLUDED
IN NET RESULT
(a) Net gain/(loss) on non-financial assets		
Impairment of property

(365)

(355)

Amortisation of non-produced intangible assets (i)

(899)

(816)

Net gain/(loss) on disposal of property, plant and equipment

825

(251)

Total net (loss) on non-financial assets

(439)

(1,422)

(b) Net gain/(loss) on financial instruments		
Net (loss)/gain on disposal of financial investments

(i) This is amortisation of non-produced
intangible assets with finite useful
lives.
(ii) For financial asset and liabilities that
are held for trading or designated at
fair value through profit or loss, the
net gain or loss is calculated by taking
the movement for the period in the fair
value of the financial asset or liability.

10

(382)

Net (loss) arising from revaluation of financial assets at fair value
– market risk (ii)

(413)

(232)

Net (increase)/decrease in receivables doubtful debt provision

216

(416)

Total net (loss) on financial instruments

(187)

(1,030)

(c) Other gains/(losses) from other economic flows		
Net gain/(loss) arising from revaluation of leave liabilities

601

2,620

Total other gains/(losses) from other economic flows

601

2,620

Total other economic flows included in net result

(25)

168

2014
$000

2013
$000

		
		

5. RECEIVABLES
Current receivables		
Contractual:			
Sales of goods and services			

3,608

3,786

Other receivables 			

82

414

3,690

4,200

				

Statutory:			
Sales of goods and services			

2,662

4,490

GST Input tax credit recoverable			

1,196

1,856

Provision for doubtful statutory receivables			

(402)

(761)

				

3,456

5,585

Total 			

7,146

9,785

(i) MFB allows 14 day credit terms on contribution receivables and 30 day credit terms on other
receivables and actively pursues accounts that fall past due. Interest is charged on overdue
contribution receivables in accordance with the Metropolitan Fire Brigades Act 1958 and
interest is not charged on overdue other receivables.
(ii) MFB has allowed for doubtful receivables based on a detailed review of outstanding accounts
and their estimated recoverable amounts.

64 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
5. RECEIVABLES (continued)
Ageing analysis of contractual financial assets
Carrying
amount
		
$000

Not past due
and not
impaired
$000

Past due but not impaired
Less than
1–3
3 months
1 month
months
– 1 year
$000
$000
$000

2014
Receivables (i)

3,690

3,056

475

72

87

Total

3,690

3,056

475

72

87

2013						
Receivables (i)
4,200
2,476
600
603
521
(i) The carrying amounts disclosed
Total

4,200

2,476

600

		
		

603

521

2014
$000

here exclude statutory amounts
(e.g. statutory sales of goods and
services receivable).

2013
$000

Movement in the provision for doubtful statutory
financial assets		
Balance at beginning of the year			
761
Amounts written off during the year			

444

(144)

(99)

Amounts recovered during the year			

4

–

(Decrease)/Increase in allowance recognised in the net result		

(216)

416

Balance at the end of the year			

405

761

Debtors in liquidation or in receivership are fully provided as doubtful debts as future receipts are
deemed unlikely.
In determining the recoverability of a trade receivable MFB considers any change in the credit
quality of the receivable from the date credit was initially granted up to the reporting date.
During the financial year, receivables deemed uncollectable and written-off totalled $144,000
(2013: $99,000).
Note 12 Financial Instruments outlines the nature and extent of risk arising from contractual
receivables.

		
		

2014
$000

2013
$000

6. INVENTORIES
Current – inventories		
Supplies, parts and security spares at cost			

1,145

1,314

Less: allowance for obsolescence			

(266)

(307)

Total			 879

1,007

MFB Annual Report 2013–14 65

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

7. NON-FINANCIAL ASSETS CLASSIFIED
AS HELD FOR SALE
(i) MFB intends to dispose of freehold
land and buildings and has a
definite plan to dispose in the next
financial year.

Current assets		
Freehold land held for sale (i)

3,284

3,180

Total physical assets classified as held for sale

3,284

3,180

Fair value measurement of non-financial physical assets held for sale
The following table provides the fair value measurement hierarchy of MFB non-financial physical
assets held for sale:
Carrying
		 amount as at
		 30 June 2014
		 $000
(ii) Classified in accordance with the
fair value hierarchy, using valuations
performed in December 2013 by
Charter Keck Cramer (ValuerGeneral Victoria appointed valuer)
see Note 1 (B).

Freehold land held for sale

Fair value measurement at end of
reporting period using:
Level 1 (ii)
Level 2 (ii)
Level 3 (ii)
$000
$000
$000

3,284

–

3,284

–

–

–

–

–

Total		 3,284

–

3,284

–

2014
$000

2013
$000

4,111

1,709

Freehold buildings held for sale

Freehold land held for sale is carried at fair value less costs of disposal.

		
		

8. OTHER NON-FINANCIAL ASSETS
Current other assets		
Prepayments

66 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

9. PROPERTY, PLANT AND EQUIPMENT
Public Safety and Environment Purpose Group
Freehold land		
At fair value – management valuation 			

181,448

193,752

Total land			

181,448

193,752

At fair value – management valuation 			

280,482

194,936

Less: accumulated depreciation			

(9,918)

–

Total buildings 			

270,564

194,936

Total land and buildings			

452,012

388,688

At fair value – management valuation 			

123,100

113,442

Less: accumulated depreciation			

(57,453)

(47,903)

Total plant and equipment			

65,647

65,539

Buildings			 4,627

43,375

Buildings

Plant and equipment

Assets under construction at cost
Plant and equipment			

7,648

9,974

Total assets under construction at cost			

12,275

53,349

Total property, plant and equipment			

529,934

507,576

Public safety and environment purpose group
Property, plant and equipment are classified primarily by the purpose for which the assets are
used according to one of six purpose groups based upon government purpose classifications.
All assets within a purpose group are further sub-categorised according to the asset’s nature
(freehold land, buildings, plant and equipment) with each sub-category being classified as a
separate class of asset for financial reporting purposes.
The Department of Treasury and Finance has determined a five-year revaluation cycle whereby
assets in a Purpose Group are revalued within the relevant year over the life of the cycle, with the
Public Safety and Environment Purpose Group revaluation performed as at 30 June 2011. The
revaluations of land and buildings were undertaken by Valuer-General Victoria who appointed
M Cleary, Certified Practising Valuer, Australian Property Institute, Member No 62839, of Urbis
Valuations Pty Ltd to perform the independent valuation with an effective date of 30 June 2011.
Fair value assessments of property, plant and equipment were performed by management as at
30 June 2014. Building valuations determined by management using the depreciated replacement
cost method resolved no material change in fair value as at 30 June 2014 and revaluation was
not required.
Vehicles are valued using the depreciated replacement cost method. MFB acquires new vehicles
and disposes these vehicles at the end of their economic life. The process of acquisition, use
and disposal in the market is managed by experienced fleet managers in MFB who set relevant
depreciation rates during use to reflect the utilisation of the vehicles. Appliance vehicles have a
15 year life.
Plant and equipment is held at fair value. When plant and equipment is specialised in use, such
that it is rarely sold other than as part of a going concern, fair value is determined using the
depreciated replacement cost method.
There were no changes in valuation techniques throughout the period to 30 June 2014.
For all assets measured at fair value, the current use is considered the highest and best use.
There was no material difference in land or plant and equipment fair values, subsequently these
asset classes were not revalued as at 30 June 2014.
MFB Annual Report 2013–14 67

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Reconciliations
Reconciliations of the carrying amounts of property, plant and equipment at the beginning and end
of the financial year are set out below:
Freehold
Buildings
Plant and Construction
land		 equipment
work in
				progress
$000
$000
$000
$000
2014
Opening balance

Total
$000

193,752

194,936

65,539

53,349

507,576

Additions

–

44,635

3,766

8,498

56,899

Disposals

–

–

(627)

–

(627)

Net revaluations increment

–

–

–

–

–

(365)

–

–

–

(365)

–

41,546

8,026

(49,572)

–

Transfers to non-financial
assets held for sale

(3,284)

–

–

–

(3,284)

Transfers to investment
property

(8,655)

(439)

–

–

(9,094)

–

(10,114)

(11,057)

–

(21,171)

181,448

270,564

65,647

12,275

529,934

Freehold
Buildings
Plant and Construction
land		 equipment
work in
				progress
$000
$000
$000
$000

Total

Impairment
Transfers from construction
work in progress

Depreciation expense
Closing balance

2013
Opening balance

195,382

177,523

Additions

1,805

Disposals

–

Net revaluations increment
Impairment
Transfers from construction
work in progress
Transfers to non-financial
assets held for sale
Depreciation expense
Closing balance

$000

68,147

19,517

460,569

4,473

6,836

37,810

50,924

–

(1,079)

–

(1,079)

–

19,826

–

–

19,826

(255)

(100)

–

–

(355)

–

1,132

2,846

(3,978)

–

(3,180)

–

–

–

(3,180)

–

(7,918)

(11,211)

–

(19,129)

193,752

194,936

65,539

53,349

507,576

In accordance with AASB 1049 Whole of Government and General Government Sector Financial
Reporting, all non-current physical assets are valued using the revaluation model.
Impairment of property, plant and equipment
An impairment loss of $365,000 recorded for the reporting period relating to land and buildings
transferred to non-financial assets held for sale to adjust the property values to reflect a book value
representing lower of book to market appraised value less costs to sell, as at 30 June 2014.

68 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Restricted assets
MFB holds $15,541,575 (written down book value 30 June 2014) worth of property listed as
heritage assets which is the old Eastern Hill fire station and the heritage recognised Eastern Hill
administration building and station. This heritage asset cannot be modified or disposed of without
formal ministerial approval.
Fair value measurement hierarchy for property, plant and equipment assets as at
30 June 2014
Carrying
amount as at
30 June 2014
$000

		
		
		

Fair value measurement at end of
reporting period using:
Level 1 (i)
Level 2 (i)
Level 3 (ii)
$000
$000
$000

Land at fair value		

181,448

–

181,448

–

Buildings at fair value		

270,564

–

–

270,564

65,647

–

–

65,647

517,659

–

181,448

336,211

Plant, equipment & vehicles at fair value (ii)
Total		

Fair value measurement hierarchy for property, plant and equipment assets as at
30 June 2013
Carrying
amount as at
30 June 2013
$000

		
			
			

Fair value measurement at end of
reporting period using:
Level 1 (i)
Level 2 (i)
Level 3 (ii)
$000
$000
$000

Land at fair value		

193,752

–

193,752

–

Buildings at fair value		

194,936

–

–

194,936

65,539

–

–

65,539

454,227

–

193,752

260,475

Plant, equipment & vehicles at fair value (ii)
Total 		

Specialised
land
$000

Specialised
buildings
$000

2014
Opening balance

–

178,143

16,793

55,660

9,879

Purchases (sales)

–

86,181

–

10,881

911

Transfers in (out) of Level 3

–

(439)

–

(586)

(41)

Depreciations

–

(8,862)

(1,252)

(8,002)

(3,055)

Impairment loss

–

–

–

–

–

Subtotal

–

255,023

15,541

57,953

7,694

Revaluation

–

–

–

–

–

Subtotal

–

–

–

–

–

Closing balance

–

255,023

15,541

57,953

7,694

Unrealised gains/(losses)
on non-financial assets

–

–

–

–

–

(i) Classified in accordance with the
fair value hierarchy, see Note 1 (B).
(ii) Emergency vehicles are categorized
as level 3 as the values are
calculated using the depreciated
replacement cost method.

Heritage Vehicles
Plant and
asset		equipment
$000
$000
$000

Reconciliation of
Level 3 fair value

Gains or losses recognised
in net result

Gains or losses recognised
in other economic flows –
other comprehensive income

MFB Annual Report 2013–14 69

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Specialised land and specialised buildings
The market approach is also used for specialised land, although is adjusted for the community
service obligations (CSO) to reflect the specialised nature of the land being valued.
The CSO adjustment is a reflection of the valuer’s assessment of the impact of restrictions
associated with an asset to the extent that is also equally applicable to market participants. This
approach is in light of the highest and best use consideration required for fair value measurement
and takes into account the use of the asset that is physically possible, legally permissible and
financially feasible. As adjustments of CSO are considered as significant unobservable inputs,
specialised land would be classified as Level 3 assets.
For MFB’s majority of specialised buildings, the depreciated replacement cost method is used,
adjusting for the associated depreciations. As depreciation adjustments are considered as
significant, unobservable inputs in nature, specialised buildings are classified as Level 3 fair value
measurements.
An independent valuation of MFB’s specialised land and specialised buildings was performed by
Urbis Valuations Pty Ltd, a VGV appointed valuer. The valuation was performed using the market
approach adjusted for CSO. The effective date of the valuation is 30 June 2011.
Specialised
land
$000

Specialised
buildings
$000

Heritage Vehicles
Plant and
asset		equipment
$000
$000
$000

2013
Opening balance

–

159,478

18,045

Purchases (sales)

–

5,605

Transfers in (out) of Level 3

–

–

Depreciations

–

Impairment loss

–

Subtotal

Reconciliation of
Level 3 fair value
60,135

8,012

–

4,695

4,987

–

(1,069)

(10)

(6,666)

(1,252)

(8,101)

(3,110)

(100)

–

–

–

–

158,317

16,793

55,660

9,879

Revaluation

–

19,826

–

–

–

Subtotal

–

19,826

–

–

–

Closing balance

–

178,143

16,793

55,660

9,879

Unrealised gains/(losses)
on non-financial assets

–

–

–

–

–

Gains or losses recognised
in net result

Gains or losses recognised
in other economic flows –
other comprehensive income

70 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
9. PROPERTY, PLANT AND EQUIPMENT (continued)
Description of significant unobservable inputs to level 3 valuations
Valuation
technique

Significant
unobservable
inputs

Range
(weighted
average)

Sensitivity of fair value
measurement to changes in
significant unobservable inputs

Specialised
land

Market
approach
[adjusted for
CSO impact]

Community
Service
Obligation
(CSO)
adjustment.

Indefinite life

A significant increase or decrease in
the CSO adjustment would result in a
significantly lower (higher) fair value.

Specialised
buildings

Depreciated
replacement
cost

Cost
consultant’s
replacement
cost per No.
Bays stations.
Useful life of
specialised
buildings.

Heritage
asset

Depreciated
replacement
cost

Depreciated
replacement
cost

Depreciated
replacement
cost

20 years

40 years

A significant increase or decrease in
the estimated useful life of the asset
would result in a significantly higher or
lower valuation.
A significant increase or decrease in
replacement value would result in a
significantly higher or lower fair value.

15 years

Management
determination
of current
replacement
values.
Useful life
of plant and
equipment.

A significant increase or decrease in
the estimated useful life of the asset
would result in a significantly higher or
lower valuation.
A significant increase or decrease
in the independent valuation would
result in a significantly higher or lower
fair value.

Replacement
value by
appliance type.
Useful life of
vehicles.

Plant and
equipment

A significant increase or decrease in
the replacement cost would result in a
significantly higher or lower fair value.

VGV appointed
valuation of
site.
Useful life of
heritage asset.

Vehicles/
emergency
appliances

20% discount
for CSO (i)

A significant increase or decrease in
the estimated useful life of the asset
would result in a significantly higher or
lower valuation.
A significant increase or decrease
in management determined current
replacement values would result in a
significantly higher or lower fair value.

3–15 years

A significant increase or decrease in
the estimated useful life of the asset
would result in a significantly higher or
lower valuation.

(i) CSO adjustments of 20 per
cent were applied to reduce
the market approach value for
MFB’s specialised land.

MFB Annual Report 2013–14 71

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

Balance at beginning of financial year			

–

–

Additions from subsequent expenditure			

–

–

Disposals and property held for sale 			

–

–

Net gain/loss from fair value adjustments			

–

–

Transfers to investment property			

9,094

–

Balance at end of financial year			

9,094

–

10. INVESTMENT PROPERTY

10.1 Fair value hierarchy
Carrying
		 amount as at
		 30 June 2014
		 $000
(i) Classified in accordance with
the fair value hierarchy.

Investment property

9,094

Fair value measurement at end of
reporting period using:
Level 1 (i)
Level 2 (i)
Level 3 (i)
$000
$000
$000
9,094

–

–

There have been no transfers between levels during the period. There were no changes in
valuation techniques throughout the period to 30 June 2014.
For investment properties measured at fair value, the current use of the asset is considered the
highest and best use.
The fair value of MFB investment properties at 30 June 2014 have been arrived at on the
basis of an independent valuation carried out by independent valuers, Urbis Valuations Pty Ltd
performed in June 2011 and the values remain materially the same. The valuation was determined
by reference to market evidence of transaction prices for similar properties with no significant
unobservable adjustments, in the same location and condition and subject to similar lease and
other contracts.

72 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

11. INTANGIBLE ASSETS
Intangible assets 				
Licence agreements at cost			

13,243

12,940

Intellectual property – system research			

560

560

Less: accumulated amortisation			

(6,934)

(5,848)

Total licence agreements			

6,869

7,652

Software at cost			

17,452

16,333

Less: accumulated amortisation			

(13,896)

(12,835)

Total software			3,556

3,498

Total intangible assets			

10,425

11,150

Intangible assets referred to above relate to software and licence agreements providing MFB with
access to optic fibre communication networks.
Intangible assets are amortised on a straight line basis over the asset life.
Reconciliations
Reconciliations of the carrying amounts of licence agreements and software at the beginning and
end of the financial year are set out below:
		
Licence Intellectual
Software
		agreements
property
		 $000
$000
$000

Total
$000

2014
Carrying amount at start of year		

7,154

498

3,498

11,150

303

–

1,266

1,569

–

–

(95)

(95)

Amortisation expense		

–

(187)

(1,113)

(1,300)

Other economic flows expense		

(899)

–

–

(899)

Carrying amount at end of year		

6,558

311

3,556

10,425

7,222

–

2,756

9,978

748

560

1,740

3,048

Disposals		 –

–

–

–

Additions		
Disposals		

2013
Carrying amount at start of year		
Additions		
Amortisation expense		

–

(62)

(998)

(1,060)

Other economic flows expense		

(816)

–

–

(816)

Carrying amount at end of year		

7,154

498

3,498

11,150

MFB Annual Report 2013–14 73

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS
Financial risk management objectives
and policies
MFB’s principal financial instruments comprise:
• cash assets
• term deposits
• receivables (excluding statutory receivables)
• investments in equities and managed
investment schemes
• debt securities
• payables (excluding statutory payables).
MFB has appropriate policies and processes
to manage financial risks associated with
financial instruments and the policies are
in accordance with the Borrowing and
Investment Powers Act 1987 and within
government policy parameters and guidelines
in relation to financial asset investment and
management. Financial investment strategies
are regularly reviewed by the Board in
conjunction with VFMC to minimise financial
risks and ensure appropriate diversification of
investment products across various entities
and to ensure earnings and capital growth are
maximised and balanced with consideration of
associated risks.
Cash and cash deposits and held to maturity
investments represent funding provided to
MFB for operations and for specific capital
works and projects which will be expended in
future years.
The Board established the fair value through
profit and loss – held for trading investments to
primarily fund its employee benefit provisions
liability and future capital works programs.
Debt security investments in the held for
trading asset present a risk of capital loss.
In consideration of this, the VFMC and the
investment manager moderate this risk
through careful selection of securities within
specified limits approved by the Board.

74 MFB Annual Report 2013–14

The maximum capital loss is the fair value
of the financial instruments. The held for
trading investments are primarily in equity
and security instruments issued by ASX200
(Australian Stock Exchange) listed companies,
as well as investments in equity instruments
issued by international listed companies. The
investments are in unlisted unit trusts managed
by or through VFMC. A significant portion of
this investment class is term and fixed interest
deposits with TCV.
The VFMC held for trading investment fair
value has increased from $109,275,000 as at
30 June 2013 to $114,014,000 as at 30 June
2014, this increase reflects the reinvestment
of dividends and interest earnings during the
reporting period and the net gain or (loss)
on financial instruments reported as other
economic flows.
The Board regularly reviews the performance,
earnings and the asset allocation of the VFMC
investments and annually reviews the portfolio
and considers the investment asset allocation.
Cash balances and held to maturity
investments are invested according to
the Department of Treasury and Finance
guidelines. As at reporting date, term
deposits are invested solely with TCV (AAA
rated) and cash balances are with Westpac
Banking Corporation, an AA rated institution
in accordance with State Treasury Risk
Management guidelines.
Receivables have established credit terms and
collection processes are applied. Additionally
receivables are regularly reviewed for
collectability and impairment and appropriate
adjustments are made to an allowance
account or the receivable is written off if
collectability is unlikely.
MFB prepares cash flow forecasts and
manages cash flows to ensure its ability to
meet all liability obligations as they fall due.

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
Contractual Contractual
financial
financial
assets/
assets/
liabilities
liabilities
designated
held-forat fair value
trading at
through
fair value
profit/loss
through
		profit/loss
$000
$000

Contractual Contractual
financial
financial
assets – liabilities at
loans and
amortised
receivables
cost

Total

$000

$000

$000

Categorisation of
financial instruments
2014
Contractual financial assets
Cash and deposits
Receivables (i)

14,235

15,000

–

–

29,235

–

–

3,690

–

3,690

Investments and other
contractual financial assets:					
Held to maturity term
deposit investments (TCV)

–

–

–

–

–

Held for trading investments					
Short term money market (TCV)

96,648

–

2,062
333

Balanced fund
Total contractual
financial assets

Infrastructure – unlisted trust
Property – unlisted trust

–

–

96,648

–

–

–

2,062

–

–

–

333

14,971

–

–

–

14,971

128,249

15,000

3,690

– 146,939

Contractual financial liabilities					
Payables – amortised cost (i)
–
–
–
17,536

17,536

Total contractual
financial liabilities

–

–

–

17,536

17,536

9,431

–

–

–

9,431

–

–

4,200

–

4,200

2013
Contractual financial assets
Cash and deposits
Receivables (i)

Investments and other
contractual financial assets:					
Held to maturity term
deposit investments (TCV)

–

50,000

–

–

50,000

Held for trading investments					
Short term money market (TCV)

93,588

–

–

–

93,588

Infrastructure – unlisted trust

2,063

–

–

–

2,063

Property – unlisted trust

1,534

–

–

–

1,534

Balanced fund

12,090

–

–

–

12,090

Total contractual
financial assets

118,706

50,000

4,200

– 172,906

Contractual financial liabilities					
Payables – amortised cost (i)
–
–
–
19,182

19,182

Total contractual
financial liabilities

19,182

–

–

–

19,182

(i) The total amounts disclosed here
exclude statutory amounts (eg
amounts owing from the Victorian
government and GST input tax credit
recoverable and taxes payable).

MFB Annual Report 2013–14 75

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
The fair values and net fair values of financial instrument assets and liabilities are determined as follows:
• Level 1 – the fair value of financial instrument with standard terms and conditions and traded in
active liquid markets are determined with reference to quoted market prices;
• Level 2 – the fair value is determined using inputs other than quoted prices that are observable
for the financial asset or liability, either directly or indirectly; and
• Level 3 – the fair value is determined in accordance with generally accepted pricing models
based on discounted cash flow analysis using unobservable market inputs.
MFB considers that the carrying amount of financial instrument assets and liabilities recorded in
the financial statements to be a fair approximation of their fair values, because of the short-term
nature of the financial instruments and the expectation that they will be paid in full.
Cash reserves, term investments and held for trading investments are held to fund employee
benefit provisions liability and specific capital projects and initiatives including Marine Response.
The following table presents MFB’s financial assets and liabilities at fair value as at 30 June 2014:
Carrying
		 amount as at
		 30 June 2014
		 $000

Fair value measurement at end of
reporting period using:
Level 1
Level 2
Level 3
$000
$000
$000

Financial assets measured
at fair value
2014
Fair value through
profit/loss investments
Held to maturity term
deposit investments
Total

114,014

91,604

22,081

329

–

–

–

–

114,014

91,604

22,081

329

Carrying
		 amount as at
		 30 June 2013
		 $000

Fair value measurement at end of
reporting period using:
Level 1
Level 2
Level 3
$000
$000
$000

Financial assets measured
at fair value
2013
Fair value through
profit/loss investments
Held to maturity term
deposit investments
Total

109,275

93,588

14,153

1,534

50,000

50,000

–

–

159,275

143,588

14,153

1,534

Financial assets at fair value
through profit/loss
Managed investment schemes
		 $000
$000
		 2014
2013

Total

Total

$000
2014

$000
2013

Reconciliation of Level 3
fair value movements
Opening balance		

1,534

3,749

1,534

3,749

Net result		

(1,205)

(2,215)

(1,205)

(2,215)

Closing balance		

329

1,534

329

1,534

Total gains or losses for the period
included in profit or loss for assets
held at the end of the period		

–

–

–

–

Total gains or losses recognised in:

76 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
12.1 Net holding gain/(loss) on financial instruments by category
Net
holding
gain/(loss)
		
$000

Total
Fee Impairment
interest
income/
loss
income/ (expense)
(expense)		
$000
$000
$000

Total

$000

2014
Contractual financial assets
Financial assets designated at
fair value through profit/loss
Financial assets – loans and receivables
Total contractual financial assets

4,738

3,046

(119)

–

7,665

–

1,362

–

–

1,362

4,738

4,408

(119)

–

9,027

Total
Fee Impairment
interest
income/
loss
income/ (expense)
(expense)		
$000
$000
$000

Total

Net
holding
gain/(loss)
		
$000

$000

2013
Contractual financial assets
Financial assets designated at
fair value through profit/loss
Financial assets – loans and receivables
Total contractual financial assets

4,652

3,603

(120)

–

8,135

–

2,952

–

–

2,952

4,652

6,555

(120)

–

11,087

The net holding gain/(loss) on financial instruments is calculated by comparing the book value of
financial assets held to the fair market value of assets held at the end of the period.
12.2 Interest rate risk
Interest rate risk relates to fluctuations in fair values or future cash flows of financial instruments
due to changes in market interest rates.
12.2(i) Held for trading financial investment assets
The majority of the held for trading financial investment assets at balance date are interest
bearing, short term investments with Treasury Corporation Victoria (TCV) consequently
MFB is subject to significant amounts of risk due to fluctuations in the prevailing levels of
market interest rates. The interest rate risk exposure at balance date is included in the
sensitivity analysis (refer to Note 12.2(iii)) below.
The Board in conjunction with the VFMC considers interest rate risk when reviewing the
investment strategy.
12.2(ii) Cash and cash deposits and held to maturity receivables financial assets
MFB is exposed to interest rate risk from its cash flow investments through bills of
exchange, bank and money market term deposits. Short term money market deposits are
invested for varying terms to meet cash flow requirements and are not hedged.
MFB’s exposure to interest rates on these financial assets is detailed in the interest rate
sensitivity analysis below (refer to Note 12.2(iii)).
12.2(iii) Interest rate sensitivity
The following interest rate sensitivity analysis has been based on the exposure to interest
rates for the above asset classes at reporting date and the change occurring at that time.
A 50 basis point change represents management’s assessment of a reasonably possible
change based upon assessment of official interest rate changes over the past five years
and considering published forecasts.
At reporting date if interest rates increased by 50 basis points and all other variables were
constant, the impact would be increased interest income of $629,000 (2013: $765,000)
and an increase by the same amount to equity. Conversely if interest rates decreased by
50 basis points interest income would reduce by ($629,000) (2013: ($765,000) and equity
would reduce by the same amount.
MFB Annual Report 2013–14 77

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
MFB’s exposure to interest rate risks and the effective interest rates for financial assets and
liabilities at balance date are:
Weighted
Carrying
average
amount
interest 		
rate
%
$000

Fixed
interest
rate

Variable
interest
rate

Noninterest
bearing

$000

$000

$000

Interest rate exposure
of financial instruments
2014
Financial assets					
Cash and deposits

2.53

29,235

15,000

14,235

–

Term deposit investments		

–

–

–

–

Receivables		 3,690

–

–

3,690

2.77

114,014

96,648

–

17,366

Total 		

146,939

111,648

14,235

21,056

Investment financial assets

Financial liabilities					
Payables		 17,536

–

–

17,536

Total 		

17,536

–

–

17,536

Weighted
Carrying
average
amount
interest 		
rate
%
$000

Fixed
interest
rate

Variable
interest
rate

Noninterest
bearing

$000

$000

$000

Interest rate exposure
of financial instruments
2013
Financial assets					
Cash and deposits

3.16

9,431

–

9,431

Term deposit investments

3.37

50,000

50,000

–

–

Receivables		 4,200

–

–

4,200

Investment financial assets

–

3.37

109,275

93,588

–

15,687

Total 		

172,906

143,588

9,431

19,887

Financial liabilities					
Payables		 19,182

–

–

19,182

Total 		

–

–

19,182

19,182

12.3 Foreign exchange risk
Foreign exchange risk arises when future transactions and recognised assets and liabilities are
denominated in a currency that is not MFB’s functional currency (Australian dollar).
MFB has no foreign currency contract obligations as at the end of the financial period.
Foreign exchange risk also impacts MFB’s held for trading investments in relation to its investments
in international equities in unlisted trusts. The hedged international equity trust maintains foreign
exchange hedge positions, subsequently foreign exchange risk is minimal; whereas the unhedged
international equity trust is exposed to foreign exchange risk. Foreign exchange risk exposure
relating to held for trading investments is managed by the fund managers and exposure risk on
international equities trust investments is accounted indirectly in the price risk sensitivity analysis
(refer to Note 12.6).
MFB’s overall foreign exchange risk management strategy remains substantially unchanged
from 2013.
78 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
12.4 Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
a financial loss to MFB. MFB’s maximum credit exposure at reporting date is the carrying amount
of the financial assets reported in the balance sheet.
12.4(i) Held for trading financial investment assets
Investment controls are in place to minimise credit risk. This includes all security
transactions being settled using approved brokers therefore the risk of default is minimal
as delivery of the securities sold is not settled until the broker has received payment.
Similarly, payment for purchased securities occurs after the securities have been received
by the broker.
12.4(ii) Held to maturity investments receivables and cash balances
MFB investment guidelines manage credit risk pertaining to held to maturity investments
by ensuring investments are restricted to term deposits with TCV.
12.4(iii) Receivables and other financial assets
MFB minimises credit risk in relation to receivables by applying commercial payment terms
and recovery processes with all customers, regular review of doubtful debts and the timely
recognition and write-off of bad debts.
Other than the term deposit investments with TCV (AAA credit rating) and financial investment
assets which are invested through VFMC in managed funds, MFB has no significant concentration
of credit risk in receivables or the other financial asset classes. MFB has no guarantees or
securities held against receivables balances.
The Board’s overall credit risk management strategy remains substantially unchanged from 2013.
Further information is shown in Note 5 Receivables.
		
Financial
Financial
State
		 Institutions
Institutions Government
		 (not rated)
(AA credit
agencies
			
rating) (AAA credit
				rating)
		$000
$000
$000

Total

$000

Credit quality of contractual
financial assets that are neither
past due or impaired
2014
Cash and cash deposits		

–

14,235

15,000

29,235

Term deposit investments		

–

–

–

–

Investment financial assets		

*17,366

–

96,648 114,014

Total contractual financial assets		

17,366

14,235

111,648 143,249

–

9,431

–

9,431

Term deposit investments		

–

–

50,000

50,000

Investment financial assets		

*15,687

–

93,588 109,275

Total contractual financial assets		

15,687

9,431

143,588 168,706

2013
Cash and cash deposits		

* Financial investment assets are
investments in primarily unlisted
managed funds which are not
credit rated. The fund managers are
reputable well established institutions
which are reviewed and approved by
VFMC.
Receivables are general invoicing
primarily to individuals and
organisations which do not generally
have recognised credit ratings.

MFB Annual Report 2013–14 79

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
12.5 Liquidity risk
Liquidity risk is the risk that MFB would be unable to meet its financial obligations as and when
they fall due, the maximum exposure to liquidity risk is the carrying amounts of financial liabilities
as disclosed in the face of the balance sheet. MFB operates under the Government fair payments
policy of settling financial obligations within 30 days and in the event of a dispute, making
payments within 30 days from the date of resolution.
MFB has an appropriate liquidity risk management framework for its short, medium and longterm funding and liquidity management requirements. MFB manages liquidity risk by maintaining
adequate reserves, banking facilities and plans its financial obligations based on forecasts of future
cash flows and holds investments and other contractual financial assets that are readily tradeable
in the financial markets.
The Board’s overall liquidity risk management strategy remains substantially unchanged from 2013.
Carrying
Nominal
amount
amount
			
$000
$000

<1
month
$000

MAT UR I T Y DAT ES
1–3 3 months
1–5
months
– 1 year
years
$000
$000
$000

5+
years
$000

Maturity analysis of
contractual financial
liabilities
2014
Financial liabilities
Payables
Supplies and
services
Other payables
Total

12,252

12,252

11,542

710

–

–

–

5,284

5,284

3,742

–

1,542

–

–

17,536

17,536

15,284

710

1,542

–

–

11,590

11,590

10,189

1,401

–

–

–

7,592

7,592

7,231

361

–

–

–

19,182

19,182

17,420

1,762

–

–

–

2013
Financial liabilities
Payables
Supplies and
services
Other payables
Total
12.6 Price risk
MFB’s held for trading investment has exposure to price risk relating to investments in unlisted
trusts which fluctuate with changes in market prices. The maximum loss of capital risk resulting
from financial instruments is the fair value of the financial instruments, except for the TCV deposits
investments where the principal value is stable.
MFB’s market price risk is managed by a significant portion of the VFMC portfolio invested in
deposits that are not price sensitive, such as TCV investments. The overall market exposures as at
30 June 2014 are listed in the table below.
Price risk sensitivity
At 30 June 2014, MFB’s market price risk is affected by three main components: changes in actual
market prices, interest rate and foreign currency movements. The following price risk sensitivity
analysis has been based upon the investment classes exposed to price risk at the reporting
date and the change occurring at that time. A 10 per cent change represents management’s
assessment of a reasonably possible change based upon assessment of commonly quoted ASX
indices changes over the past five years and forecasts by financial institutions.

80 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
12. FINANCIAL INSTRUMENTS (continued)
12.6 Price risk (continued)
Fair value through profit and loss – held for trading investment in unlisted trusts (by investment
category):
Effective
+ 10% INCREASE
Exposure
IN UNIT PRICE
		Income
Equity
		impact
impact
$000
$000
$000

-10% DECREASE
IN UNIT PRICE
Income
Equity
impact
impact
$000
$000

2014
Infrastructure
Property

2,062

206

206

(206)

(206)

333

33

33

(33)

(33)

Balanced fund

14,971

1,497

1,497

(1,497)

(1,497)

Total

17,366

1,736

1,736

(1,736)

(1,736)

The effective exposure amounts above reflect the carrying amounts.
Fair value through profit and loss – held for trading investment in unlisted trusts (by investment
category):
Effective
+ 10% INCREASE
Exposure
IN UNIT PRICE
		Income
Equity
		impact
impact
$000
$000
$000

-10% DECREASE
IN UNIT PRICE
Income
Equity
impact
impact
$000
$000

2013
Infrastructure

2,063

206

206

(206)

(206)

Property

1,534

153

153

(153)

(153)

Balanced fund

12,090

1,209

1,209

(1,209)

(1,209)

Total

15,687

1,568

1,568

(1,568)

(1,568)

The effective exposure amounts above reflect the carrying amounts.
12.7 Capital risk
MFB manages its capital and regularly prepares forecasts and analysis to ensure the organisation’s
ability to continue as a going concern with an optimal balance of debt and equity.
MFB is not subject to externally imposed capital requirements under our banking contract or other
third party contracts.
12.8 Financial instruments – fair value measurement
MFB considers that the carrying amount of financial assets and financial liabilities recorded in the
financial statements reflects their fair values.
The fair values of financial assets and financial liabilities are determined as follows:
•

the fair value of financial assets and financial liabilities with standard terms and conditions and
traded on active liquid markets are determined with reference to quoted market prices

•

the fair value of other financial assets and financial liabilities that are determined in accordance
with generally accepted valuation models using inputs observed in active markets

•

the fair value of unlisted trusts are based upon the redemption price as advised by the fund
manager.

MFB Annual Report 2013–14 81

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

13. PAYABLES
Current payables				
Contractual:				
Supplies and services 			

12,252

11,590

Other payables and accrued expenses 			

5,284

7,592

				

17,536

19,182

Statutory:				
2,087

1,072

Total			19,623

20,254

Amounts payable to government and agencies 		

MFB applies the Victorian Government Fair Payment Policy on supplier payments. Accordingly,
suppliers are paid within 30 days from invoice date unless other agreed contractual or legal terms
apply. MFB has procedures in place to ensure that payables are paid within credit timeframes.
Under the Fair Payment Policy MFB may be liable for penalty interest payments on overdue
accounts. No interest penalties were incurred during the period under review (2013: Nil).

			
Carrying
Nominal
amount
amount
$000
$000

MATURITY DATES
1–3
3 months
months
– 1 year
$000
$000

Payables commitment analysis
2014

19,623

19,623

18,081

1,542

2013

20,254

20,254

19,893

361

Note 12 Financial Instruments outlines the nature and extent of risk arising from payables.

82 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

Unconditional and expected to be settled within 12 months (i)

17,093

15,957

Unconditional and expected to be settled after 12 months (ii)		

11,925

10,653

Unconditional and expected to be settled within 12 months (i)

1,473

384

Unconditional and expected to be settled after 12 months (ii)		

3,505

2,837

4,923

4,923

Unconditional and expected to be settled after 12 months (ii)		51,135

49,738

14. PROVISIONS
(a) Employee benefits
Current provisions		
Annual Leave			

Accrued Leave			

Long Service Leave			
Unconditional and expected to be settled within 12 months (i)
Enterprise agreement determinations (accrued)		

–

2,373

				90,055

86,865

Provision for on-costs			
Unconditional and expected to be settled within 12 months (i)

2,506

1,954

Unconditional and expected to be settled after 12 months (ii)		

10,833

10,976

			13,339

12,930

Total current provisions			

103,394

99,795

3,617

3,561

On-costs (ii)			667

664

Non-current provisions		
Employee benefits – long service leave (ii)			
Total non-current provisions			

4,284

4,225

Total provisions			107,678

104,020

(b) Movement in provisions 		
Opening balance			13,594

12,934

Additional provisions recognised			

10,128

9,426

Reductions arising from payments/other sacrifices
of future economic benefits			

(9,644)

(8,525)

Unwind of discount and effect of changes in the discount rate		

(72)

(241)

Closing balance			14,006

13,594

(i) Employee benefits consist of
annual leave and long service leave
accrued by employees. On-costs
such as payroll tax and workers’
compensation insurance are not
employee benefits and are reflected
as a separate provision.
(ii) The amounts disclosed are
discounted to present values.

MFB Annual Report 2013–14 83

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

Current balance			

740

490

Non-current balance			

1,335

1,650

Total			2,075

2,140

15. OTHER LIABILITIES

The carrying amounts reflect income received in advance from the CFA for prepaid future access
to the optical fibre communications network.

16. SUPERANNUATION
MFB employees and members of the Board are entitled to receive superannuation benefits and
MFB contributes to both defined benefit and accumulation contribution plans managed by the
Emergency Services and State Super superannuation fund (ESSS). The defined benefit plan
provides benefits based on years of service and final average salary.
MFB does not recognise any defined benefit liability in respect of the plan because MFB has no
legal or constructive obligation to pay future benefits relating to its employees; its only obligation
is to pay superannuation contributions as they fall due. The Department of Treasury and Finance
discloses the State’s defined benefit liabilities in its disclosure for administered items.
However, superannuation contributions paid or payable for the reporting period are included as
part of employee benefits in the comprehensive operating statement of MFB.
During the year, MFB made superannuation payments of $17.6 million (2013: $17.1 million)
primarily to ESSS. In the current year there were no additional payments to superannuation above
the contribution rate designated by ESSS for defined benefit members and the super guarantee
contribution rate of 9.25 per cent for non-defined benefit plan members.
There were no superannuation contributions outstanding at 30 June 2014 (2013: Nil).
Employer contribution rates were:
Accumulation scheme
9.25 per cent of salary for non-operational staff employed after 31 December 1993.
Effective 1 July 2014, the Super Guarantee rate increases to 9.50 per cent and applies to the
accumulation scheme members.
Defined benefits scheme
The average employer contribution rate for the financial year was 11.0 per cent (2013: 11.0 per
cent) of salary for all operational staff as well as for non-operational staff employed prior to
1 January 1994.

84 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

17. COMMITMENTS FOR EXPENDITURE
The following commitments have not been recognised as liabilities
in the financial statements and are exclusive of GST:
Commitments
Capital expenditure commitments
Commitments for the acquisition of property, plant and equipment
contracted at reporting date but not recognised as liabilities:			
Payable:
Within one year

		

11,732

44,827

Total 			

11,732

44,827

Operating lease commitments
Commitments for minimum lease payments in relation to
non-cancellable operating leases at the reporting date
but not recognised as liabilities:		
Payable:				
Within one year			

644

635

Longer than one year but not longer than five years		

777

324

Longer than five years			

24

–

Total				

1,445

959

Recurrent service commitments
Commitments for the acquisition of recurrent goods and services
not recognised as liabilities:		
Payable:				
Within one year			

30,738

17,710

Longer than one year but not longer than five years		

41,874

44,960

Total				

72,612

62,670

A significant proportion of the above recurrent service commitments relate to MFB’s obligations
under the Statewide Integrated Public Safety and Communications Strategy (SIPSaCS) which
covers call taking and dispatch services. There is an ongoing Service Agreement with the
Emergency Services Telecommunications Authority (ESTA) for the provision of call taking and
dispatch services for the metropolitan district. The ESTA service fees for the year to 30 June 2014
were $11.3 million (2013: $11.8 million).
All the expenditure amounts shown in the above commitments note are nominal amounts.

18. CONTINGENT ASSETS AND CONTINGENT LIABILITIES
The following matters are subject to legal proceedings and MFB has chosen not to disclose further
details due to legal privilege.
Contingent asset
MFB has a claim with the City of Yarra for the recovery of costs relating to remediation of
contamination at the Burnley Complex.
Contingent liability
A claim against MFB has been registered in relation to overtime payment processing for the
Hazelwood coal seam incident, the financial effect of the claim cannot be estimated reliably at the
time of preparing these statements.

MFB Annual Report 2013–14 85

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

Balance at beginning of financial year			

103,352

103,352

Revaluation increments/(decrements)			

–

–

Total				

103,352

103,352

19. EQUITY
Reserves
Physical asset revaluation surplus			
Land				

Buildings				
Balance at beginning of financial year			

103,998

84,172

Revaluation increments/(decrements)			

–

19,826

Total				

103,998

103,998

Plant and equipment				
Balance at beginning of financial year			

15,338

15,338

Revaluation increments/(decrements)			

–

–

Total				

15,338

15,338

Balance at end of financial year			

222,688

222,688

Accumulated surplus				
Balance at beginning of financial year			

232,234

231,231

Net result			

2,047

1,003

Balance at end of financial year			

234,281

232,234

Contributed capital				

86 MFB Annual Report 2013–14

Balance at beginning of financial year			

121,777

121,777

Transactions with owners in their capacity as owners		

–

–

Balance at end of financial year			

121,777

121,777

Total equity at end of the financial year			

578,746

576,699

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

Total cash and deposits disclosed in the balance sheet		

29,235

9,431

Balance as per cash flow statement			

29,235

9,431

2,047

1,003

(Gain)/loss on sale or disposal of non-financial assets		

(825)

251

Net loss/(gain) on financial instruments			

(11)

382

Unrealised loss on held for trading investments		

413

231

Depreciation and amortisation of non-financial assets 		

23,369

21,005

Impairment of non-financial assets			

365

355

(Decrease)/increase in allowance for doubtful debts 		

(359)

316

(Decrease) in allowance for inventory obsolescence		

(42)

(48)

Decrease/(Increase) in other receivables			

2,998

(3,036)

Decrease in inventories			

168

10

(Increase) in prepayments			

(2,402)

(4,964)

(Decrease)/increase in payables			

(631)

1,387

Increase in employee benefits provisions			

3,658

5,878

20. NOTES TO THE CASH FLOW STATEMENT
(a) Reconciliation of cash
For the purposes of the cash flow statement, cash comprises
cash on hand, cash at bank, bank overdrafts, deposits at call
and highly liquid investments with short periods to maturity that
are readily convertible to cash on hand and are subject to an
insignificant risk of changes in value. Cash at the end of the
financial year as shown in the cash flow statement is reconciled
to the balance sheet as follows:			

(b) Reconciliation of net result for the reporting period to
cashflows from operating activities
Net result for the period			
Non-cash movements

Movements in assets and liabilitiess

(Decrease) in income received in advance			

(65)

(293)

Net cash inflow from operating activities			

28,683

22,477

21. BANK OVERDRAFT
MFB has an overdraft facility of $100,000 which is repayable upon demand and may be
cancelled at any time upon review by the bank. As at balance date this facility had not been
utilised (2013: Nil).

MFB Annual Report 2013–14 87

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
22. RESPONSIBLE PERSONS
In accordance with the Ministerial Directions issued by the Minister for Finance under the Financial
Management Act 1994, the following disclosures are made regarding responsible persons for the
reporting period:
		
Responsible
Minister

Board
Members

Accountable
Officers

Period of tenure

The Honorable K Wells MP
Minister for Police and Emergency Services

01/07/13 – 30/06/14

The Honorable E O’Donohue MLC
Acting Minister for Police and Emergency Services

10/07/13 – 28/07/13

The Honorable R Clark MP
Acting Minister for Police and Emergency Services

20/12/13 – 05/01/14

The Honorable E O’Donohue MLC
Acting Minister for Police and Emergency Services

06/01/14 – 12/01/14

M N Comrie AO APM – President

01/07/13 – 30/06/14

J A Bonnington

01/07/13 – 30/06/14

K W King

01/07/13 – 30/06/14

A Long – Retired

01/07/13 – 13/09/13

S F Alford – Appointed

14/09/13 – 30/06/14

D Purchase OAM

01/07/13 – 30/06/14

J Lord AM

01/07/13 – 30/06/14

T A Ryan – Appointed

20/08/13 – 30/06/14

J Higgins ASM – Chief Executive Officer

28/04/14 – 30/06/14

R Eddington – Acting Chief Executive Officer/
Executive Director

24/12/13 – 03/01/14

R Eddington – Acting Chief Executive Officer/
Executive Director

08/02/14 – 17/04/14

N Easy – Chief Executive Officer

01/07/13 – 07/02/14

P Rau – Acting Chief Executive Officer/Chief Officer

18/04/14 – 27/04/14

Related parties
M N Comrie is the Victorian Bushfire Royal Commission Implementation Monitor, Chair of
Ministerial Community Advisory Committee on Corrections and Chairman DrinkWise Australia.
J A Bonnington is a Non-Executive Director – Utilities Trust of Australia and HESTA
Superannuation. Community Non Executive Director – Deakin University Council and Director
JS Bonnington & Associates Pty Ltd.
K W King is a Board Member – Natural Resources Conservation League; Australian Research
Centre for Urban Ecology and Director Habitat Melbourne Trust.
D Purchase is Executive Director of the Victorian Automobile Chamber of Commerce.
J Lord is a Member of Ministerial Community Advisory Committee on Corrections.
T A Ryan is Chair of the Advisory Committee of the Office of Correctional Services Review; a NonExecutive Director of Victorian Managed Insurance Authority and a Board Member of Yarra Valley
Water and VicForests.
S F Alford is a Board Member Eastern Health, Audit Committee member Victorian Curriculum
and Assessment Authority, Chair Audit Committee – Australian Accounting Standards Board and
Auditing and Assurance Standards Board.
J Higgins is a Director of the Emergency Services Foundation, Fellow – Australian College of
Ambulance Professionals. Trustee Member, Committee for Economic Development of Australia.
Member, Institute of Public Administration of Australia.
N Easy had a voting right on the Australasian Fire and Emergency Service Authorities Council and
was a Director of the Emergency Services Foundation.
All services and transactions were conducted at arms’ length with the MFB Board and at normal
commercial terms.
88 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
Number

2013
Number

Remuneration Band
$
0 – $ 9,999			

1

–

$ 10,000 – $ 19,999			

5

4

$ 20,000 – $ 29,999			

1

1

$ 50,000 – $ 59,999			

1

1

							

8

6

$000

$000

175

159

2014
Number

2013
Number

Remuneration Band
$ 10,000 – $ 19,999			

–

1

$ 50,000 – $ 59,999			

1

–

$250,000 – $ 259,999			

1

–

22. RESPONSIBLE PERSONS (continued)
Remuneration of responsible persons
The number of Responsible Persons is shown below in their
relevant income bands:

		
Total remuneration of Responsible Persons other than the
Responsible Minister:				

The remuneration of the Responsible Minister is reported
separately in the financial statements of the Department
of Premier and Cabinet.
Remuneration received by Accountable Officers in connection
with the management of MFB during the reporting period
was in the following ranges:
		
		

$370,000 – $379,999				

–

1

							

2

2

							

$000

$000

312

391

Total remuneration of Accountable Officers:		

During the current period, the following personnel performed as Acting Chief Executive Officer:
Russell Eddington Executive Director Corporate Services
Russell Eddington Executive Director Corporate Services
Peter Rau Chief Officer

24/12/2013 – 03/01/2014
08/02/2014 – 17/04/2014
18/04/2014 – 27/04/2014

Accountable Officer remuneration includes all remuneration including salary, salary sacrifice,
fringe benefits applicable, leave entitlements paid and applicable performance bonus paid
during the period. The above amounts record payments made in each year, accordingly accrued
remuneration pertaining to 2013 was included in 2014.

MFB Annual Report 2013–14 89

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
23. REMUNERATION OF EXECUTIVE OFFICERS AND PAYMENTS TO
OTHER PERSONNEL
The number of executive officers, other than Ministers and Accountable Officers and their total
remuneration during the reporting period is recorded in the first two columns in the table below
in their relevant income bands. These tables include staff who are placed on a short-term basis
in executive positions temporarily when the positions are vacant due to retirement, long service
leave and similar. The base remuneration of executive officers is recorded in the third and fourth
columns. Base remuneration is exclusive of bonus payments, long service leave payments,
redundancy payments and retirement benefits.
Several factors have affected total remuneration payable to executives over the financial year,
primarily bonus payments based upon individual employment contracts, payments taken in lieu of
leave and the duration of employment during the financial year.
A number of executive officers retired or resigned in the past year. This impacted on both the total
number of executives included below and on total remuneration figures due to the inclusion of
annual leave and long-service leave payments. Additionally, part year employment arrangements
and short term placement into executive positions are accounted for in the total number of
executives and annualised employee equivalent numbers represented below.
Total remuneration
		
2014
2013
		No.
No.

(i) Annualised employee equivalent is
based on paid working hours of 38
ordinary hours per week over the
52 weeks for a reporting period.
(ii)* A number of executives received
base and total remuneration
in the 2012/13 financial year
below $100,000 due to part
year employment and short term
placements in executive positions.

Base remuneration
2014
2013
No.
No.

Executive Officers
Remuneration Band
$
0 – $ 99,999 *		
$ 100,000 – $ 109,999		
$ 110,000 – $ 119,999		
$ 120,000 – $ 129,999		
$ 130,000 – $ 139,999		
$ 140,000 – $ 149,999		
$ 150,000 – $ 159,999		
$ 160,000 – $ 169,999		
$ 170,000 – $ 179,999		
$ 180,000 – $ 189,999		
$ 190,000 – $ 199,999		
$ 200,000 – $ 209,999		
$ 210,000 – $ 219,999		
$ 220,000 – $ 229,999		
$ 230,000 – $ 239,999		
$ 240,000 – $ 249,999		
$ 250,000 – $ 259,999		
$ 260,000 – $ 269,999		
$ 270,000 – $ 279,999		
$ 280,000 – $ 289,999 		
$ 290,000 – $ 299,999 		
$ 300,000 – $ 309,999 		
$ 340,000 – $ 349,999		

8
1
–
1
2
1
1
3
3
2
3
8
3
3
3
2
1
2
1
1
1
–
–

4
3
1
1
1
–
2
4
5
7
3
4
1
4
1
–
1
–
1
–
–
1
1

11
1
2
3
–
3
6
3
4
13
2
–
–
2
–
–
–
–
–
–
–
–
–

9
2
3
1
2
2
5
1
15
2
–
–
–
2
1
–
–
–
–
–
–
–
–

Total number of executive officers		

50

45

50

45

Total annualised employee equivalent (AEE) (i)

42

37

42

37

Total remuneration ($000)		

9,215

8,059

7,017

6,240

Correction of Prior Reporting Period Error
The 2012–13 comparative information has been restated. The data for the prior year was collated
manually from the payroll system and had inaccuracies whereas a report has since been created
to detail all executives and persons acting in the role of a vacant executive position and more
reliably provides the data for the current and prior reporting periods.
The restatement resulted in total base remuneration altering from $6.906 million to a revised
$6.240 million; total remuneration was revised from $7.880 million to $8.059 million. AEE reduced
from 38 to 37.
90 MFB Annual Report 2013–14

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
		
		

2014
$000

2013
$000

Remuneration Band
$
0 – $ 99,999			

1

67

$100,000 – $ 109,999			

–

74

$130,000 – $ 139,999			

–

121

$190,000 – $ 199,999			

–

12

$220,000 – $ 229,999			

–

116

$230,000 – $ 239,999			

–

56

$270,000 – $ 279,999			

101

–

$290,000 – $ 299,999			

106

–

23. REMUNERATION OF EXECUTIVE OFFICERS
AND PAYMENTS TO OTHER PERSONNEL
(continued)
The above remuneration amounts include leave or termination
payments of:

$340,000 – $ 349,999			
Total							

–

307

208

753

Payments to other personnel (i.e. contractors with significant management
responsibilities)
There were no payments made to other personnel in 2014 (2013: Nil).

24. REMUNERATION OF AUDITORS
Total remuneration payable to the Auditor-General for auditing the financial statements for the year
ended 30 June 2014 was $100,350 (2013: $100,350).

25. SUBSEQUENT EVENTS
There are no other material subsequent events since reporting date.

MFB Annual Report 2013–14 91

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
26. GLOSSARY OF TERMS AND
STYLE CONVENTIONS
Amortisation
Amortisation is the expense which results
from the consumption, extraction or use over
time of a non-produced physical or intangible
asset. This expense is classified as an other
economic flow.
Comprehensive result
The net result of all items of income and
expense recognised for the period. It is the
aggregate of operating result and other
comprehensive income.
Commitments
Commitments include those operating, capital
and other outsourcing commitments arising
from non-cancellable contractual or statutory
sources.
Depreciation
Depreciation is an expense that arises from
the consumption through wear or time of a
produced physical or intangible asset. This
expense is classified as a ‘transaction’ and so
reduces the ‘net result from transaction’.
Effective interest method
The effective interest method is used to
calculate the amortised cost of a financial
asset or liability and of allocating interest
income over the relevant period. The effective
interest rate is the rate that exactly discounts
estimated future cash receipts through the
expected life of the financial instrument, or,
where appropriate, a shorter period.
Employee benefits expenses
Employee benefits expenses include all costs
related to employment including wages and
salaries, fringe benefits tax, leave entitlements,
redundancy payments, defined benefits
superannuation plans and defined contribution
superannuation plans.
Ex-gratia expenses
Ex-gratia expenses mean the voluntary
payment of money or other non-monetary
benefit (eg: a write-off) that is not made either
to acquire goods, services or other benefits for
the entity or to meet a legal liability, or to settle
or resolve a possible legal liability or claim
against the entity.
Financial asset
A financial asset is any asset that is:
(a) cash;
(b) an equity instrument of another entity;
(c) a contractual or statutory right:
• to receive cash or another financial asset
from another entity; or

92 MFB Annual Report 2013–14

• to exchange financial assets or financial
liabilities with another entity under
conditions that are potentially favourable
to the entity; or
(d) a contract that will or may be settled in the
entity’s own equity instruments and is:
• a non-derivative for which the entity is
or may be obliged to receive a variable
number of the entity’s own equity
instruments; or
• a derivative that will or may be settled
other than by the exchange of a fixed
amount of cash or another financial
asset for a fixed number of the entity’s
own equity instruments.
Financial instrument
A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity. Financial assets or liabilities that are
not contractual (such as statutory receivables
or payables that arise as a result of statutory
requirements imposed by governments) are
not financial instruments.
Financial liability
A financial liability is any liability that is:
(a) A contractual or statutory obligation:
(i) to deliver cash or another financial asset
to another entity; or
(ii) to exchange financial assets or
financial liabilities with another entity
under conditions that are potentially
unfavourable to the entity; or
(b) A contract that will or may be settled in the
entity’s own equity instruments and is:
(i) a non-derivative for which the entity is
or may be obliged to deliver a variable
number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled
other than by the exchange of a fixed
amount of cash or another financial
asset for a fixed number of the
entity’s own equity instruments. For
this purpose the entity’s own equity
instruments do not include instruments
that are themselves contracts for the
future receipt or delivery of the entity’s
own equity instruments.
Financial statements
A complete set of financial statements
comprises:
(a) a balance sheet as at the end of the period
(b) a comprehensive operating statement for
the period
(c) a statement of changes in equity for the
period

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
(d) a cashflow statement for the period
(e) notes, comprising a summary of significant
accounting policies and other explanatory
information
(f) comparative information in respect of
the preceding period as specified in
paragraphs 38 of AASB 101 Presentation
of Financial Statements
(g) a statement of financial position as at the
beginning of the preceding period when
an entity applies an accounting policy
retrospectively or makes a retrospective
restatement of items in its financial
statements, or when it reclassifies items in
its financial statements in accordance with
paragraphs 41 of AASB 101.
Intangible assets
Intangible assets represent identifiable nonmonetary assets without physical substance.
Interest expense
Costs incurred in connection with the
borrowing of funds includes interest on bank
overdrafts and short-term and long-term
borrowings, amortisation of discounts or
premiums relating to borrowings, interest
component of finance leases repayments and
the increase in financial liabilities and nonemployee provisions due to the unwinding of
discounts to reflect the passage of time.
Interest income
Interest income includes unwinding over time
of discounts on financial assets and interest
received on bank term deposits and other
investments.
Net acquisition of non-financial assets
(from transactions)
Purchases (and other acquisitions) of nonfinancial assets less sales (or disposals) of
non-financial assets less depreciation plus
changes in inventories and other movements
in non-financial assets. It includes only those
increases or decreases in non-financial assets
resulting from transactions and therefore
excludes write-offs, impairment write-downs
and revaluations.
Net result
Net result is a measure of financial
performance of the operations for the period. It
is the net result of items of income, gains and
expenses (including losses) recognised for the
period, excluding those that are classified as
‘other economic flows – other comprehensive
income’.
Net result from transactions /net
operating balance
Net result from transactions or net operating
balance is a key fiscal aggregate and is income
from transactions minus expenses from
transactions. It is a summary measure of the
ongoing sustainability of operations.

It excludes gains and losses resulting from
changes in price levels and other changes
in the volume of assets. It is the component
of the change in net worth that is due to
transactions and can be attributed directly to
government policies.
Net worth
Assets less liabilities, which is an economic
measure of wealth.
Non-financial assets
Non-financial assets are all assets that are not
‘financial assets’. It includes inventories, land,
buildings, infrastructure, road networks, land
under roads, plant and equipment, investment
properties, cultural and heritage assets,
intangible and biological assets.
Non-produced assets
Non-produced assets are assets needed for
production that have not themselves been
produced. They include land, subsoil assets
and certain intangible assets. Non-produced
intangibles are intangible assets needed for
production that have not themselves been
produced. They include constructs of society
such as patents.
Other economic flows included in
net result
Other economic flows are changes in the
volume or value of an asset or liability that do
not result from transactions. It includes:
•

gains and losses from disposals,
revaluations and impairments of nonfinancial physical and intangible assets

•

fair value changes of financial instruments.

Other economic flows – other
comprehensive income
Other economic flows – other comprehensive
income comprises items (including
reclassification adjustments) that are not
recognised in net result as required or
permitted by other Australian Accounting
Standards.
The components of other economic flows –
other comprehensive income include:
(a) changes in physical asset revaluation
surplus;
(b) share of net movement in revaluation
surplus of associates and joint ventures;
and
(c) gains and losses on re-measuring
available-for-sale financial assets.
Payables
Includes short and long term trade debt and
accounts payable, grants and interest payable.

MFB Annual Report 2013–14 93

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2014
Receivables

Style conventions

Includes short and long term trade credit and
accounts receivable, accrued investment
income, grants, taxes and interest receivable.

Figures in the tables and in the text have been
rounded. Discrepancies in tables between
totals and sums of components reflect
rounding. Percentage variations in all tables are
based on the underlying unrounded amounts.

Sales of goods and services
Refers to income from the direct provision of
goods and services and includes fees and
charges for services rendered, sales of goods
and services, fees from regulatory services and
work done as an agent for private enterprises.
It also includes rental income under operating
leases and on produced assets such as land.
User charges includes sale of goods and
services income.
Supplies and services
Supplies and services generally represent cost
of goods sold and the day-to-day running
costs, including maintenance costs, incurred in
the normal operations of MFB.
Transactions
Transactions are those economic flows that
are considered to arise as a result of policy
decisions, usually an interaction between
two entities by mutual agreement. They also
include flows in an entity such as depreciation
where the owner is simultaneously acting as
the owner of the depreciating asset and as
the consumer of the service provided by the
asset. Transactions can be in kind (e.g. assets
provided/given free of charge or for nominal
consideration) or where the final consideration
is cash. In simple terms, transactions arise
from the policy decisions of the government.

94 MFB Annual Report 2013–14

The notation used in the tables is as follows:
–		
xxx.x)		
201x		
201x–1x

zero, or rounded to zero
negative numbers
year period
year period

The financial statements and notes are
presented based on the illustration for a
government department in the 2013–14 Model
Report for Victorian Government Departments.
The presentation of other disclosures is
generally consistent with the other disclosures
made in earlier publications of MFB’s annual
reports.

RESPONSIBLE PERSONS’ AND CHIEF FINANCE AND
ACCOUNTING OFFICER’S DECLARATION
We certify that the attached financial statements have been prepared for the Metropolitan Fire
and Emergency Services Board in accordance with Standing Direction 4.2 of the Financial
Management Act 1994, applicable Financial Reporting Directions, Australian Accounting
Standards, including interpretations and other mandatory professional reporting requirements.
We further state that in our opinion, the information set out in the comprehensive operating
statement, balance sheet, statement of changes in equity, cash flow statement and accompanying
notes forming part of the financial statements presents fairly the financial transactions during the
year ended 30 June 2014 and financial position of the Metropolitan Fire and Emergency Services
Board as at 30 June 2014.
At the time of signing, we are not aware of any circumstance which would render any particulars
included in the financial statements to be misleading or inaccurate.
We authorise the attached financial statements for issue on 12 August 2014.

Neil Comrie AO, APM
President
Melbourne
12 August 2014

James Higgins ASM
Chief Executive Officer
Melbourne
12 August 2014

Russell Eddington
Executive Director, Corporate Services
Melbourne
12 August 2014

MFB Annual Report 2013–14 95

96 MFB Annual Report 2013–14

MFB Annual Report 2013–14 97

MFB Headquarters, 456 Albert Street,
East Melbourne Victoria 3002 Australia.
Telephone +61 3 9662 2311
Facsimile +61 3 9665 4244
www.mfb.vic.gov.au
ABN 28 598 558 561

98 MFB Annual Report 2013–14



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File Type                       : PDF
File Type Extension             : pdf
MIME Type                       : application/pdf
PDF Version                     : 1.4
Linearized                      : Yes
Tagged PDF                      : Yes
XMP Toolkit                     : Adobe XMP Core 5.5-c021 79.154911, 2013/10/29-11:47:16
Create Date                     : 2014:09:05 15:48:28+10:00
Metadata Date                   : 2014:09:05 15:48:40+10:00
Modify Date                     : 2014:09:05 15:48:40+10:00
Creator Tool                    : Adobe InDesign CC (Macintosh)
Instance ID                     : uuid:53cf6996-8516-b042-8db1-b10ee954391f
Original Document ID            : xmp.did:9f5ac70b-b57d-4dd6-abd4-e25f47615248
Document ID                     : xmp.id:5b68cd04-b2e4-46b4-a8fb-5d83dd5108ff
Rendition Class                 : proof:pdf
Derived From Instance ID        : xmp.iid:291f996e-b471-477d-9a1a-fe16aa3e373b
Derived From Document ID        : xmp.did:78560221-03c4-4c39-8cea-54418389f746
Derived From Original Document ID: xmp.did:9f5ac70b-b57d-4dd6-abd4-e25f47615248
Derived From Rendition Class    : default
History Action                  : converted
History Parameters              : from application/x-indesign to application/pdf
History Software Agent          : Adobe InDesign CC (Macintosh)
History Changed                 : /
History When                    : 2014:09:05 15:48:28+10:00
Format                          : application/pdf
Producer                        : Adobe PDF Library 11.0
Trapped                         : False
Page Count                      : 100
Creator                         : Adobe InDesign CC (Macintosh)

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