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Department of Treasury

• Notes to the Financial Statements

Section 3: Budgeted Financial Statements

The budgeted financial statements will form the basis of the financial statements that will appear in the Department's 2000-01 Annual Report and for the input into the Whole of Government Accounts. The financial statements should be read in conjunction with the accompanying notes to the financial statements.

The financial statements are prepared consistent with GST accounting requirements, as outlined by the Urgent Issues Group (UIG) of the Australian Accounting Research Foundation. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable are reported gross. Appropriations are thus net of recoverable GST amounts.

Budget Statement of Revenues and Expenses (Budget Operating Statement)

This statement provides a picture of the expected financial results for the Department of the Treasury by identifying expenses and revenues on an accrual basis, which highlights whether the Department is operating at a sustainable level. See Table 3.1. Administered revenues and expenses are shown at Table 3.6.

Budget Statement of Assets and Liabilities (Budget Balance Sheet)

This statement shows the financial position of the Department. It enables decision-makers to track the management of Departmental and Administered assets and liabilities. See Tables 3.2 and 3.7.

Budget Cash Flow Statement

This statement identifies expected cash flows from departmental and administered operating activities, investing activities and financing activities. See Tables 3.3 and 3.8.

Capital Budget Statement

This statement shows all proposed capital expenditure for departmental and administered items funded either through capital appropriations or from internal sources. See Tables 3.4 and 3.9.

Non-financial Assets - Summary of Movement

This statement shows the movement in the Department's non-financial assets during the budget year. See Table 3.5.

Table 3.1: Departmental Budget Statement of Revenues and Expenses
(for the period ended 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Operating revenue
Revenues from Government	65,583	71,913	70,190	72,151	74,675
Sales of goods and services	42,395	32,022	29,032	29,043	29,553
Interest	298	298	298	298	298
Net gains from sales of assets	40	-	44	46	47
Other	5,451	3,984	647	656	666
Total operating revenues	113,767	108,217	100,211	102,194	105,239
Operating expenses
Employees	46,091	49,069	46,488	47,449	48,349
Suppliers	60,458	48,698	44,019	45,784	47,201
Depreciation and amortisation	3,124	3,382	3,663	2,972	3,281
Interest	56	602	602	602	602
Total operating expenses	109,729	101,751	94,772	96,807	99,433
Operating surplus or deficit before abnormal and extraordinary items	4,038	6,466	5,439	5,387	5,806
Capital use charge paid	-1,539	-3,369	-3,591	-3,783	-4,000
Operating surplus or deficit after abnormal and extraordinary items and CUC	2,499	3,097	1,848	1,604	1,806

Table 3.2: Departmental Budget Statement of Assets and Liabilities
(as at 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Assets
Financial assets
Cash	11,351	16,429	20,718	22,246	22,853
Receivables	1,998	2,352	2,706	3,060	3,414
Other	453	453	453	453	453
Total financial assets	13,802	19,234	23,877	25,759	26,720
Non-financial assets
Infrastructure, plant and equipment	13,194	22,164	21,889	20,900	20,964
Inventories	13,194	13,194	13,194	13,194	13,194
Intangibles	5,330	4,264	3,411	2,729	2,183
Other	1,420	1,350	1,283	1,221	1,161
Total non-financial assets	33,138	40,972	39,777	38,044	37,502
Total assets	46,940	60,206	63,654	63,803	64,222
Liabilities
Debt
Loans	474	10,185	10,526	8,697	6,933
Leases	854	427	1,000	573	146
Total debt	1,328	10,612	11,526	9,270	7,079
Provisions and payables
Employees	12,359	13,250	13,933	14,719	15,521
Suppliers	1,003	996	999	1,014	1,016
Other	7,271	7,272	7,272	7,272	7,272
Total provisions and payables	20,633	21,518	22,204	23,005	23,809
Total liabilities	21,961	32,130	33,730	32,275	30,888
Equity
Reserves	5,672	5,672	5,672	5,672	5,672
Accumulated results	19,307	22,404	24,252	25,856	27,662
Total equity	24,979	28,076	29,924	31,528	33,334
Current liabilities	12,731	12,216	12,579	12,028	11,609
Non-current liabilities	9,230	19,914	21,151	20,247	19,279
Current assets	28,416	33,778	38,355	40,175	41,076
Non-current assets	18,524	26,428	25,299	23,628	23,146

Table 3.3: Departmental Budget Cash Flow Statement
(for the period ended 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Operating activities
Cash received
Appropriations for outputs	65,583	71,913	70,190	72,151	74,675
Sales of goods and services	42,356	32,021	29,031	29,042	29,551
Other	9,747	3,928	591	600	610
Total cash received	117,686	107,862	99,812	101,793	104,836
Cash used
Payments to employees	45,011	48,178	45,805	46,663	47,547
Payments to suppliers	60,130	48,362	43,674	45,434	46,836
Interest and other financing costs	56	602	602	602	602
Total cash used	105,197	97,142	90,081	92,699	94,985
Net cash from operating activities	12,489	10,720	9,731	9,094	9,851
Investing activities
Cash received
Proceeds from sales of property, plant and equipment	40	-	44	46	46
Total cash received	40	-	44	46	46
Cash used
Purchase of property, plant and equipment	-	380	-	2,000	3,500
Total cash used	-	380	-	2,000	3,500
Net cash from investing activities	40	-380	44	-1,954	-3,454
Financing activities
Cash received
Total cash received	-	-	-	-	-
Cash used
Repayments of borrowings	175	1,894	1,902	1,829	1,789
Capital use and dividends paid	1,539	3,368	3,584	3,783	4,001
Total cash used	1,714	5,262	5,486	5,612	5,790
Net cash from financing activities	-1,714	-5,262	-5,486	-5,612	-5,790
Net increase in cash held	10,815	5,078	4,289	1,528	607
Cash at the beginning of the reporting period	536	11,351	16,429	20,718	22,246
Cash at the end of the reporting period	11,351	16,429	20,718	22,246	22,853

Table 3.4: Departmental Capital Budget Statement (as at 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Capital appropriations
Total equity injections	3,763	-	-	-	-
Total loans	775	-	-	-	-
Represented by:
Purchase of non-current assets	775	-	-	-	-
Other	3,763	-	-	-	-
Total	4,538	-	-	-	-
Purchase of non-current assets
Funded by capital appropriations	775	-	-	-	-
Funded internally by departmental resources	588	11,986	3,235	2,000	3,499
Total amount funded	1,363	11,986	3,235	2,000	3,499

Table 3.5: Departmental Non-financial Assets - Summary of Movement

	Land $'000	Buildings $'000	Total Land and Buildings $'000	Other Infrastructure, Plant and Equipment $'000	Total Infrastructure, Plant and Equipment $'000	Intangibles $'000	Total $'000
Gross value
As at 1 July 2000 (opening)	-	-	-	18,051	18,051	7,292	25,343
Additions	-	-	-	11,986	11,986	-	11,986
Disposals	-	-	-	-700	-700	-	-700
Other movements	-	-	-	-79	-79	-	-79
As at 30 June 2001 (closing)	-	-	-	29,258	29,258	7,292	36,550
Accumulated depreciation
As at 1 July 2000 (opening)	-	-	-	4,857	4,857	1,962	6,819
Disposals	-	-	-	-79	-79	-	-79
Charge for the reporting period	-	-	-	2,316	2,316	1,066	3,382
Other movements	-	-	-	-	-	-	-
As at 30 June 2001 (closing)	-	-	-	7,094	7,094	3,028	10,122
Net book value as at 30 June 2001 (Closing book value)	-	-	-	22,164	22,164	4,264	26,428
Net book value as at 1 July 2000 (Opening book value)	-	-	-	13,194	13,194	5,330	18,524

Total additions

Self funded	-	-	-	11,986	11,986	-	11,986
Appropriations	-	-	-	-	-	-	-
Total	-	-	-	11,986	11,986	-	11,986

Table 3.6: Administered Budget Statement of Revenues and Expenses
(for the period ended 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Operating revenues
Taxation
Other taxes, fees and fines	-6,968,224	-24,415,805	-28,029,178	-29,083,285	-30,737,235
Total taxation	-6,968,224	-24,415,805	-28,029,178	-29,083,285	-30,737,235
Non-taxation
Revenues from Government	25,364,398	26,179,979	32,076,362	31,672,692	32,758,430
Interest and dividends	3,676,000	909,717	1,513,360	1,511,538	1,505,997
Other sources of non-taxation revenues	353,409	233,520	217,115	211,370	204,329
Total non-taxation	29,393,807	27,323,216	33,806,837	33,395,600	34,468,756
Total operating revenues	22,425,583	2,907,411	5,777,659	4,312,315	3,731,521
Operating expenses
Grants	18,334,076	1,701,947	3,988,626	2,531,849	1,964,637
Net foreign exchange losses	-403,721	2,763	-	-	-
Other	62,808	59,456	55,637	56,211	53,822
Total operating expenses	17,993,163	1,764,166	4,044,263	2,588,060	2,018,459
Net contribution or cost to the budget outcome	4,432,420	1,143,245	1,733,396	1,724,255	1,713,062
Transfers to the official public account
Amount remitted from administered revenues	-3,457,130	-1,795,449	-3,373,838	-1,792,990	-1,799,395
Net surplus or deficit	975,290	-652,204	-1,640,442	-68,735	-86,333

Table 3.7: Administered Budget Statement of Assets and Liabilities
(as at 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Assets
Financial assets
Cash	3,626	3,626	3,626	3,626	3,626
Receivables	880,103	1,866,713	211,064	134,141	45,072
Investments	15,751,314	15,799,613	15,801,633	15,801,633	15,801,633
Total financial assets	16,635,043	17,669,952	16,016,323	15,939,400	15,850,331
Non-financial assets
Other	6,169	2,846	1,187	356	356
Total non-financial assets	6,169	2,846	1,187	356	356
Total assets	16,641,212	17,672,798	16,017,510	15,939,756	15,850,687
Liabilities
Debt
Loans	4,326,702	4,352,080	4,339,830	4,329,247	4,318,664
Other	1,023,369	1,023,369	1,023,369	1,023,369	1,023,369
Total debt	5,350,071	5,375,449	5,363,199	5,352,616	5,342,033
Provisions and payables
Grants	22,500	20,000	17,500	15,000	12,500
Other	113,320	41,816	24,950	15,931	13,195
Total provisions and payables	135,820	61,816	42,450	30,931	25,695
Total liabilities	5,485,891	5,437,265	5,405,649	5,383,547	5,367,728
Equity
Capital	309,530	2,041,946	2,058,716	2,071,799	2,084,882
Accumulated results	10,845,791	10,193,587	8,553,145	8,484,410	8,398,077
Total equity	11,155,321	12,235,533	10,611,861	10,556,209	10,482,959
Current liabilities	5,404,042	5,407,779	5,382,565	5,363,211	5,350,450
Non-current liabilities	81,849	29,486	23,084	20,336	17,278
Current assets	883,729	1,870,339	214,690	137,767	48,698
Non-current assets	15,757,483	15,802,459	15,802,820	15,801,989	15,801,989

Table 3.8: Administered Budget Cash Flow Statement
(for the period ended 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Operating activities
Cash received
Appropriations	25,372,253	26,182,374	32,078,862	31,675,192	32,760,930
Interest and dividends	3,000,000	1,585,717	1,513,360	1,511,538	1,505,997
Other	457,130	209,732	204,829	204,529	204,329
Total cash received	28,829,383	27,977,823	33,797,051	33,391,259	34,471,256
Cash used
Grants	18,336,576	1,704,447	3,991,126	2,534,349	1,967,137
Cash to official public account	3,457,130	1,795,449	1,718,189	1,716,067	1,710,326
Other	7,035,677	24,477,927	28,087,736	29,140,843	30,793,793
Total cash used	28,829,383	27,977,823	33,797,051	33,391,259	34,471,256
Net cash from operating activities	-	-	-	-	-
Investing activities
Cash received
Cash from official public account	137,519	1,722,450	7,805	5,785	5,785
Other	-	-	1,655,649	76,923	89,069
Total cash received	137,519	1,722,450	1,663,454	82,708	94,854
Cash used
Cash to official public account	-	-	1,655,649	76,923	89,069
Other	137,519	1,722,450	7,805	5,785	5,785
Total cash used	137,519	1,722,450	1,663,454	82,708	94,854
Net cash from investing activities	-	-	-	-	-
Financing activities
Cash received
Proceeds from borrowings	169,511	7,466	6,465	4,798	4,798
Total cash received	169,511	7,466	6,465	4,798	4,798
Cash used
Other	169,511	7,466	6,465	4,798	4,798
Total cash used	169,511	7,466	6,465	4,798	4,798
Net cash from financing activities	-	-	-	-	-
Net increase in cash held	-	-	-	-	-
Cash at beginning of reporting period	3,626	3,626	3,626	3,626	3,626
Cash at end of reporting period	3,626	3,626	3,626	3,626	3,626

Table 3.9: Administered Capital Budget Statement (as at 30 June)

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000	Forward Estimate 2001-02 $'000	Forward Estimate 2002-03 $'000	Forward Estimate 2003-04 $'000
Capital appropriations
Administered capital	15,215	2,500	2,500	2,500	2,500
Special appropriations	294,315	1,729,916	14,270	10,583	10,583
Total	309,530	1,732,416	16,770	13,083	13,083
Represented by
Purchase of financial assets	309,530	1,732,416	16,770	13,083	13,083
Other	-	-	-	-	-
Total	309,530	1,732,416	16,770	13,083	13,083

Notes to the Financial Statements

Basis of Accounting

The Department of the Treasury's budget statements have been prepared on an accrual basis and are in accordance with historical cost convention, except for certain assets which are at valuation.

Departmental and Administered Financial Statements

Under the Commonwealth's accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that agencies control (departmental transactions) are separately budgeted for and reported on from transactions agencies do not have control over (administered transactions). This ensures that agencies are only held accountable for the transactions over which they have control.

Departmental assets, liabilities, revenues and expenses in relation to an agency are those which are controlled by the agency. Departmental expenses include employee and supplier expenses and other administrative costs which are incurred by the agency in providing its goods and services.

Administered items are revenues, expenses, assets or liabilities which are managed by an agency on behalf of the Government according to set Government directions. Administered expenses include subsidies, grants, and personal benefit payments and administered revenues include taxes, fees, fines and excises.

Royal Australian Mint

The Department of the Treasury's departmental budget statements are aggregated to include the financial operations of the Royal Australian Mint (RAM). Seigniorage is collected by RAM on behalf of the Commonwealth. Seigniorage represents the difference between the face value of coinage sold to the Reserve Bank of Australia and its cost of production to RAM. Seigniorage is treated as an administered item within the budget statements.

Appropriations in the Accrual Budgeting Framework

Under the Commonwealth's accrual budgeting framework, separate annual appropriations are provided for departmental price of outputs appropriations representing the Government's purchase of outputs from agencies and departmental capital appropriations for investments by the Government for either additional equity or loans in agencies.

Capital Use Charge

A capital use charge is levied on agencies and authorities to reflect the cost of the Commonwealth's investment in those entities. It is levied on the closing balance of departmental net assets (equity) at a rate of 12 per cent.

Funding for the capital use charge is included in agencies' and authorities' departmental price of outputs appropriations. The capital use charge is accounted for as a `below operating result line' expense.

Cash Transfers to Official Public Account (OPA)

Administered revenues, such as taxes, fees and fines, which are collected by agencies and authorities, are passed on to the Commonwealth's OPA. These transfers are shown in the administered Operating Statement as `Cash transfers to OPA', which is a `below operating result line' expense.

Administered Budget Statement of Revenue and Expenses

Taxation revenue payments

The Commonwealth collects a number of taxes on an agency basis for the States and Territories. These include `safety net' revenue replacement payments on excise and wholesale sales tax surcharge collections until 1 July 2000 and from 1 July 2000 the goods and services tax.

The revenue from these taxes is passed to State and Territory Governments (with an adjustment for administration costs in the case of revenue replacement payments). Estimates of taxes collected by the Commonwealth and passed to State and Territory Governments are provided in the following table.

While for constitutional reasons the GST is levied by the Commonwealth, and can therefore be technically considered a Commonwealth revenue under the reporting standards, the clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations (the IGA) is that it is a State tax collected by the Commonwealth in an agency capacity. Accordingly, GST payments are treated as negative revenue in these financial statements representing the transfer of taxes to State and Territory governments. This fully offsets GST revenue recorded by the Australian Taxation Office so that at a consolidated level the GST is not recorded as Commonwealth revenue.

Appendix 1

Non-appropriation Departmental and Administered Revenue

	Estimated Actual 1999-00 $'000	Budget Estimate 2000-01 $'000
Departmental revenue
Departmental Section 31 receipts	4,798	3,062
Royal Australian Mint revenue	43,386	33,242
Total non-appropriation departmental revenue	48,184	36,304
Appropriation revenue	65,583	71,913
Total departmental revenue	113,767	108,217
Administered revenue
A New Tax System (Commonwealth-State Financial Arrangements) Act 1999 - GST revenue payments	-	-24,052,566
revenue replacement payments	-	-363,239
Banking Act 1959 - Unclaimed moneys	18,000	-
Bank dividends	3,676,000	900,000
Financial sector supervisory levies	101,210	61,040
Housing Loans Insurance Corporation - recoveries from old book stock and premiums	41,069	25,536
Monitoring of the prices of certain milk products	500	-
Other	-	9,717
Postal services regulation	-	1,000
Receipts under the International Monetary Agreements Act 1947	78,374	82,744
Royal Australian Mint and Coinage Trust Account - moneys in excess of requirements	113,500	62,500
Seigniorage payments - Gold Corporation	756	700
States Grants (General Purposes) Act 1994 - revenue replacement payments	-6,968,224	-
Total non-appropriation administered revenue	-2,938,815	-23,272,568
Appropriation revenue	25,364,398	26,179,979
Total administered revenue	22,425,583	2,907,411