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MID-YEAR ECONOMIC AND FISCAL OUTLOOK 2001-02

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Appendix A: Government Finance Statistics statements

The Commonwealth, States and Territories have an agreed framework - the Accrual Uniform Presentation Framework (UPF) - for the presentation of government financial information on a basis consistent with the ABS Government Finance Statistics (GFS) publication. This Appendix presents Commonwealth data on a GFS basis, as required by the UPF. An exception to this is the treatment of provisions for bad and doubtful debts. The draft ABS GFS publication (Australian System of Government Finance Statistics: Concepts, Sources and Methods Cat. No. 5514.0) requires that provisions for bad and doubtful debts be excluded from the balance sheet. This treatment has not been adopted because excluding such provisions would overstate the value of Commonwealth assets in the balance sheet (and would therefore be inconsistent with the market valuation principle).

The statistical tables that are presented below include an operating statement, balance sheet and cash flow statement for the Commonwealth general government, public non-financial corporations (PNFC) and total non-financial public sectors.

The clear policy intent of the Intergovernmental Agreement on Commonwealth-State Financial Arrangements is that GST is collected by the Commonwealth, as an agent for the States and Territories, and appropriated to the States. As such, it is not shown as Commonwealth revenue in Part III and Appendices B and E. However, the tables in this Part are presented on an accrual UPF reporting basis, and show GST as revenue in and expenses out.

Consistent with Australian Bureau of Statistics (ABS) practice, transactions between the Commonwealth general government and PNFC sectors are included in the tables produced for these sectors, but are removed from the total non-financial sector tables as they are transactions internal to that sector.

Appendix D provides reconciliations between key GFS aggregates and their Australian Accounting Standard No. 31 (AAS31) counterparts.

Government finance statistics statements

Table A1: Commonwealth general government operating statement

Table A1: Commonwealth general government operating statement

(a) GFS net lending also equals net transactions in financial assets less net transactions in liabilities. The term `fiscal balance' is not used by the ABS.

(b) The fiscal balance and net operating balance estimates for 2001-02 in this table are $150 million greater than the 2001-02 fiscal balance and net operating balance estimates elsewhere in the MYEFO. This represents GST revenue accrued in 2001-02 but not yet paid to the States (as GST is paid to the States on a cash basis). Under the State tax treatment applied elsewhere in this document, GST revenue accrued is offset by an equivalent amount payable to the States. Further information is provided in Attachment A to Part I of the Final Budget Outcome 2000-01.

Table A2: Commonwealth general government sector balance sheet

Table A2: Commonwealth general government sector balance sheet

(a) Net worth is calculated as assets minus liabilities.

(b) The net worth estimates in this table are $214 million greater than the net worth estimates elsewhere in the MYEFO. This represents GST revenue accrued but not yet paid to the States (as GST is paid to the States on a cash basis). Under the State tax treatment applied elsewhere in this document, GST revenue accrued is offset by an equivalent amount payable to the States. Further information is provided in Attachment A to Part I of the Final Budget Outcome 2000-01.

(c) Net financial worth equals total financial assets minus total liabilities.

(d) Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

Table A3: Commonwealth general government sector cash flow statement(a)

Table A3: Commonwealth general government sector cash flow statement(a)

(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.

(b) The acquisition of assets under finance leases reduces the surplus/deficit.

Table A4: Commonwealth public non-financial corporations operating statement

Table A4: Commonwealth public non-financial corporations operating statement

(a) GFS net lending also equals net transactions in financial assets less net transactions in liabilities. The term `fiscal balance' is not used by the ABS.

Table A5: Commonwealth public non-financial corporations balance sheet

Table A5: Commonwealth public non-financial corporations balance sheet

(a) Net worth is calculated as assets minus liabilities minus shares and other contributed capital.

(b) Net financial worth equals total financial assets minus total liabilities minus shares and other contributed capital.

(c) Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

Table A6: Commonwealth public non-financial corporations
cash flow statement(a)

Table A6: Commonwealth public non-financial corporations cash flow statement

(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.

(b) `Other payments for operating activities' includes the cash flow to the general government sector from PNFC distributions paid.

(c) `Distributions paid' comprise PNFC dividends to external shareholders.

(d) The acquisition of assets under finance leases reduces the surplus/deficit.

Table A7: Commonwealth total non-financial public sector operating statement

Table A7: Commonwealth total non-financial public sector operating statement

(a) GFS net lending also equals net transactions in financial assets less net transactions in liabilities. The term `fiscal balance' is not used by the ABS.

(b) The fiscal balance and net operating balance estimates for 2001-02 in this table are $150 million greater than the fiscal balance and net operating balance 2001-02 estimates in Appendix E. This represents GST revenue accrued in 2001-02 but not yet paid to the States (as GST is paid to the States on a cash basis). Under the State tax treatment applied elsewhere in this document, GST revenue accrued is offset by an equivalent amount payable to the States. Further information is provided in Attachment A to Part I of the Final Budget Outcome 2000-01.

Table A8: Commonwealth total non-financial public sector balance sheet

Table A8: Commonwealth total non-financial public sector balance sheet

(a) Net worth is calculated as assets minus liabilities minus shares and other contributed capital.

(b) The net worth estimates in this table are $214 million greater than the net worth estimates in Appendix E. This represents GST revenue accrued but not yet paid to the States (as GST is paid to the States on a cash basis). Under the State tax treatment applied elsewhere in this document, GST revenue accrued is offset by an equivalent amount payable to the States. Further information is provided in Attachment A to Part I of the Final Budget Outcome 2000-01.

(c) Net financial worth equals total financial assets minus total liabilities minus shares and other contributed capital.

(d) Net debt equals the sum of deposits held, advances received and borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements

Table A9: Commonwealth total non-financial public sector
cash flow statement(a)

Table A9: Commonwealth total non-financial public sector cash flow statement(a)

(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.

(b) `Distributions paid' comprise PNFC dividends to external shareholders.

(c) The acquisition of assets under finance leases reduces the surplus/deficit.

Loan Council Allocation

Under Loan Council arrangements, every year the Commonwealth and each State and Territory nominate a Loan Council Allocation (LCA). A jurisdiction's LCA incorporates:

· the estimated non-financial public sector cash deficit (made up from the general government and public non-financial corporations sectors deficits);

· net cash flows from investments in financial assets for policy purposes; and

· memorandum items. These transactions, though not formally borrowings, have many of the characteristics of borrowing.

LCA nominations are considered by the Loan Council, having regard to each jurisdiction's fiscal position and reasonable infrastructure requirements, as well as the macroeconomic implications of aggregate figure.

In March 2001 the Commonwealth nominated, and the Loan Council endorsed, an LCA surplus for 2001-02 of $12.6 billion. In the 2001-02 Budget the Commonwealth estimated a LCA surplus of $7.8 billion. Table A10 presents a revised estimate for the Commonwealth's 2001-02 LCA of a $3.8 billion surplus.

Table A10: Commonwealth Loan Council Allocation for 2001-02

Table A10:  Commonwealth Loan Council Allocation for 2001-02

(a) Such transactions involve the transfer or exchange of a financial asset and are not included within the cash deficit. However, the cash flow from investments in financial assets for policy purposes has implications for a government's call on financial markets.

(b) For the Commonwealth, memorandum items comprise the change in net present value (NPV) of operating leases (with NPV greater than $5 million), university borrowings, overfunding of superannuation and an adjustment to exclude the net financing requirements of statutory marketing authorities and Telstra from the LCA.

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