Total Fund Deposit
The Total Fund Deposit provides confidence that the management actions required under a Biodiversity Stewardship Agreement will be undertaken and lead to biodiversity gains.
The Total Fund Deposit is the amount of money set out in a Biodiversity Stewardship Agreement to cover the costs of future land management activities required under the Biodiversity Stewardship Agreement for that site. Total Fund Deposits are costed using the Total Fund Deposit Calculator and checked by the department as part of the Biodiversity Stewardship Agreement application to ensure they are adequate. Learn more about Biodiversity Stewardship Agreements.
When a Biodiversity Stewardship Agreement holder sells or retires credits, payments must be made into the Biodiversity Stewardship Payments Fund until the Total Fund Deposit amount is met.
If all credits generated under a Biodiversity Stewardship Agreement are sold, the entire Total Fund Deposit must be paid. If a portion of the credits are sold the relevant portion of the Total Fund Deposit must be paid.
The Biodiversity Conservation Trust manages and invests monies paid into the Biodiversity Stewardship Payments Fund.
Once the Total Fund Deposit amount is met, the Biodiversity Conservation Trust makes annual payments to the Biodiversity Stewardship Agreement holder to cover the agreed costs of land management activities.
Calculating Total Fund Deposit amounts
Landholders and accredited assessors use the Total Fund Deposit Calculator to estimate the Total Fund Deposit amount and annual payment schedule for Biodiversity Stewardship Agreements.
Management costs vary based on the size, location, vegetation type, cover and condition topography, fencing requirements and boundary management issues specific to each site.
When using the Total Fund Deposit Calculator, the cost for each management action in a Biodiversity Stewardship Agreement management plan should be entered at current dollar value along with timing.
Costs should be based on the price of a contractor or specialist undertaking the work, even when you may be able to undertake the management actions yourself. This ensures that management continues if your circumstances change, or you sell your property. In addition to land management, other recurring costs can be entered, such as recordkeeping, rates and insurance information.
The calculator tallies the costs of all required management and applies a discount rate, which accounts for a return on investment, fund management and risk, to determine the Total Fund Deposit and annual payment schedule.
The landholder submits the completed calculator document as part of a Biodiversity Stewardship Agreement application. In assessing the application, the Credits Supply Taskforce reviews the calculator to ensure that the proposed Total Fund Deposit is adequate to fund the site's management.
For further details on using the calculator, refer to the Quick guide at the first tab in the calculator spreadsheet.
Total Fund Deposit discount rate
A discount rate for each Total Fund Deposit amount is used in the formula to work out how to cost land management over time.
The current discount rate is 3.2%, which applies to Biodiversity Stewardship Agreements entered from 15 August 2022.
The department uses the following formula to determine the Total Fund Deposit discount rate:
Biodiversity Stewardship Payments Fund investments rate of return – Biodiversity Conservation Trust costs of managing the fund – Minister's risk tolerance margin = Total Fund Deposit amount
Guidance about Total Fund Deposit discount rate changes
The department has published a framework providing guidance about when it will review and consider changing the Total Fund Deposit discount rate. In summary:
- The department will undertake a scheduled review of the Total Fund Deposit discount rate every 4 years and may undertake an unscheduled review at any other time if there are special circumstances.
- The department will consider changing the Total Fund Deposit discount rate if there have been material changes to expected investment returns and management costs for the Biodiversity Stewardship Payments Fund and the government’s risk tolerance.
- Once a review of the Total Fund Deposit discount rate has been completed, the department will publish the review outcomes on this website, including reasons for changing or not changing the Total Fund Deposit discount rate.
- Changes to the Total Fund Deposit discount rate will be communicated at least 4 weeks before coming into effect.
Reviews of the discount rate
The discount rate was first set at 3.5% in 2009 and has been adjusted twice:
- from 3.5% to 2.6% in 2018
- from 2.6% to 3.2% in 2022.
The next review of the discount rate is scheduled for the first half of the 2024 calendar year.
For more information, refer to the Framework for reviewing the Total Fund Deposit discount rate.