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From our Chief Financial Officer

The financial statements of the Australian Red Cross Society (the Society) incorporate both the Humanitarian Services and Blood Service operating divisions. The Blood Service division supplies the Australian community with safe, high-quality-blood and related products. Humanitarian Services supports and empowers people and communities.

Overview

I would like to thank all of the financial supporters, donors, volunteers, staff and members who have donated their blood, time or money to enable Red Cross to achieve amazing outcomes. Together we all bring the power of humanity to life.

This financial year we have continued to successfully deliver against our objectives to support Australian and global communities. The Society reported total revenue of $900.845 million, of which $628.577 million relates to funding provided to the operation of the Blood Service and $272.268 million was generated through Humanitarian Services.

The Society reported a net deficit of $4.647 million ($8.776 million surplus from Blood Service and $13.423 million deficit from Humanitarian Services).

Humanitarian Services

We achieved most of our financial objectives for 2018, supported by continued community giving. This has enabled us to focus on positive social impact and investing into new technologies that will enable us to continue supporting people who need us in a rapidly changing world.

The Australian public donated more than $101.889 million to help us deliver programs and strengthen communities. Our Humanitarian Services revenue also included $102.863 million from Commonwealth government grants and $16.229 million from State government grants. Together this enabled us to build capacity within our communities, help people to live safely and provide relief in times of crisis.

Also in our result are $5.932 million of expenses and distributions we have made from domestic and international disaster appeals, and donations received in previous periods.

Our income can vary significantly year on year depending on the level of government funding and the community’s response to large-scale domestic and international emergencies. Compared to previous years, there has been lower levels of such emergencies.

Our overall result for Humanitarian Services was a deficit of $13.423 million. This includes an expense of $16.623 million for estimated back payments set aside to correct remuneration for our staff, after an extensive review of current and historical awards, bringing our total provision for this to $21.823 million. We have accumulated reserves available so that the current operating budget for much-needed humanitarian services is not impacted.

We continue to strive towards our Strategy 2020 outcomes and demonstrate our humanity in action. We are extremely grateful for the legacy of significant community support we have received during the year. We have also invested in the future of Red Cross by developing new technology and platforms to connect millions of Australians.

During 2018 we transitioned out as a provider of the Australian Government’s Status Resolution Support Services program. This contract, which commenced in 2015, was significant for Red Cross, contributing $31.585 million in revenue in 2018 and employing 266 people across Australia. In the finalisation of the contract, our focus was our clients and employees, finding them new service providers and opportunities. Looking ahead, we remain focused on supporting migrants in transition and creating new ways to meet their needs.

We have responsibility to ensure we protect those who are most vulnerable, including any sensitive data we have and manage funding appropriately. To ensure this, we are continuing to invest into our processes to transform our organisation. In 2018 we invested $2 million into protecting our data and $2.6 million into child safety. Throughout this, we are keeping people at the centre of all our changes.

Blood Service

Our Blood Service division finished the year with a surplus of $8.776 million. This represents another successful year and the ninth consecutive operating surplus recorded. Under our Deed of Agreement, the Blood Service is able to retain up to $5.000 million from National Blood Authority funded main operating program surplus which, prior to providing for the return of funds to Government was $45.178 million. An additional amount of $0.521 million will also be carried over in the Research and Development reserve to be spent on research activities in future years.

Our primary funding arrangement is with the National Blood Authority under an output-based model. Our performance under this arrangement was strong again this year with continued growth in plasma where we achieved our target of 675 tonnes of plasma for fractionation. Red Cell products were supplied at 1% over our estimate reflecting consistency in demand.

Maintaining a stable and secure blood supply requires continual investment. This year, we invested $56.300 million of funding from the National Blood Authority into the upgrade of our donor and processing centres, testing and laboratory equipment and our technology infrastructure.

Outside of our output-funding arrangement with the National Blood Authority, we continue to provide a range of related services such as transplant and immunogenetic services across New South Wales, Victoria and South Australia.

Our Blood Service cash and investment position remains strong at $172.910 million, inclusive of repayment of borrowings of $14.648 million.

Cameron Power
Chief Financial Officer