As a GBE, we are required to maintain a strong financial position and meet commercial return obligations, including the payment of dividends to the Australian Government. In agreement with our Shareholder Ministers, and as outlined in our Corporate Plan, our target dividend is based on 60 per cent of net profit after tax.
Our funding model
We do not receive funding directly from the Federal Budget. We fund our operations through:
- the receipt of commercial rent, fees and charges from Defence for our services
- generating revenue from:
- selling and leasing back properties through our property investment program
- the disposal of excess land and completed properties from our developments
- the disposal of properties that no longer meet minimum Defence standards or provisioning requirements.
We have a loan agreement with the Commonwealth. The total amount of the loan facility is $635 million. As at 30 June 2017, we had loans totalling $509.6 million.
We are a full tax-paying entity in relation to federal taxes (e.g. corporate income tax, goods and services tax [GST] and fringe benefit tax [FBT]). We also pay state and territory-based taxes (e.g. stamp duty and land tax) or an equivalent in accordance with competitive neutrality requirements.
Refer to Part 3 of this report for more information about our financial management and performance in 2016–17.
Our credit rating
Standard & Poor’s Rating Services conducts an annual credit rating assessment of DHA.
Their report issued on 21 December 2016 confirmed a corporate credit issuer rating of AA+. This rating is reflective of their assessment of the effect of government ownership and the level of support implied by that ownership.
Standard & Poor’s also provided a standalone credit profile rating of DHA of BBB+. This credit profile is one rating above the target for GBEs specified by the Australian Government.