Total Fund Deposit and discount rate

Find out about the Total Fund Deposit and the discount rate.

The Total Fund Deposit (TFD) is the amount of money set in a Biodiversity Stewardship Agreement (BSA) to cover future land management costs.

Total Fund Deposits are paid into the Biodiversity Stewardship Payments Fund (BSPF) when credits are sold. This fund is then used to make annual payments to the landholder to cover costs of land management under the BSA management plan. The Biodiversity Conservation Trust manages and invests the funds held in the Biodiversity Stewardship Payments Fund.

The Total Fund Deposit discount rate

Under the Biodiversity Conservation Act 2016, the department determines the TFD amount.

This is calculated as the amount of money that needs to be invested now to fund agreed management actions at a Biodiversity Stewardship Agreement site into the future. A discount rate for each total fund deposit is used in the formula to work out how to cost land management over time.

The current discount rate, which applies to Biodiversity Stewardship Agreements entered from 15 August 2022, is 3.2%.

The department uses the following formula to determine the discount rate:

BSPF
rate of return		 – Biodiversity Conservation Trust costs of managing the BSPF – Minister's risk tolerance margin =  TFD discount rate

Guidance about discount rate changes

The department has published a framework that provides guidance about when it will review and consider changing the TFD discount rate.

In summary:

  • The department will undertake a scheduled review of the 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 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 discount rate has been completed, the department will publish the outcomes of the review, including reasons for changing or not changing the discount rate, on this website.
  • Changes to the discount rate will be communicated at least 4 weeks before coming into effect.

The discount rate was first set at 3.5% in 2009 and has been adjusted twice:

  • from 3.5 to 2.6% in 2018, and
  • 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, see the Framework for reviewing the TFD discount rate.

Total Fund Deposit Calculator

The Total Fund Deposit Calculator helps estimate the Total Fund Deposit amount and payment schedule.

The costs of managing a Biodiversity Stewardship Agreement site will vary according to its size, location, vegetation type, cover and condition, topography, fencing and possible boundary management issues. These factors all influence the Total Fund Deposit needed to cover the costs of managing the Biodiversity Stewardship Agreement site in perpetuity. The management actions at the Biodiversity Stewardship Agreement site are determined by applying the Biodiversity Assessment Method.

This Total Fund Deposit Calculator breaks down specific management actions and plans into individual tasks for the short and long-term and helps determine the frequency of the actions. Landholders can price each task based on the current costs of materials and labour. All estimated annual costs should be entered on the calculator. The landholder should enter costs at current dollar value as the discount rate will automatically apply to determine future costs.

Current and previous calculator spreadsheets