Statement 9: Government Finance Statistics Statements

The financial tables presented in this statement are prepared in accordance with the Australian Bureau of Statistics (ABS) accrual Government Finance Statistics (GFS) framework.

The Commonwealth, States and Territories have an agreed framework - the Accrual Uniform Presentation Framework - for the presentation of government financial information on a basis consistent with the ABS GFS publication. This statement presents Commonwealth data on an ABS GFS basis, as required by the Uniform Presentation Framework, except in areas listed in this statement.

In accordance with Uniform Presentation Framework requirements, Statement 9 also contains an update of the Commonwealth's Loan Council Allocation. This information was formerly presented in Budget Paper No. 3, Federal Financial Relations 2003-04.

Financial tables presented in this statement are prepared in accordance with the Australian Bureau of Statistics (ABS) accrual Government Finance Statistics (GFS) framework.

The tables include an operating statement, balance sheet and cash flow statement for the Commonwealth general government, public non-financial corporations and total non‑financial public sectors. A statement of other economic flows is also included for the Commonwealth general government sector and primarily outlines how other economic flows (those economic flows not accounted for in the GFS operating statement, namely changes in assets and liabilities arising from price and volume changes) impact on the net worth of the Commonwealth general government sector.

bad and doubtful debts are included in the balance sheet and the statement of other economic flows, because excluding such provisions would overstate net worth; and

defence weapons inventories are recorded as capital investment rather than expensed until such inventories can be reliably identified and measured.

The clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations is that GST is collected by the Commonwealth, as an agent for the States and Territories, and appropriated to the States. Consequently, it is not shown as Commonwealth revenue in other statements in this document. However, the tables in this statement are presented on an accrual Uniform Presentation Framework reporting basis, and show GST as taxation revenue in and payments to the States as grant expenses out.

As a result of the two different treatments of GST related transactions, fiscal balance, net operating balance and net worth estimates in this statement improve compared to those reported elsewhere in the Budget papers. This represents the effect of GST revenue accrued but not yet received and, therefore, not yet paid or payable to the States (as GST obligations to the States are on a cash basis).¹ This accounting difference is an accrual issue only: the underlying cash balance is not affected and provides identical results under both treatments of GST revenue.

Consistent with ABS practice, transactions between the Commonwealth general government and public non-financial corporations sectors are included in the tables produced for these sectors, but are removed from the total non-financial public sector tables as they are transactions internal to that sector.

Key GFS aggregates are explained and reconciled with their Australian Accounting Standard No. 31 Financial Reporting by Governments (AAS31) counterparts in Statement 8.

Government finance statistics statements

Table 1: Commonwealth general government sector operating statement

(a) The fiscal balance and net operating balance estimates in this table improve compared to those presented elsewhere in the Budget reflecting the treatment of the GST as a Commonwealth tax.

(b) The term 'fiscal balance' is not used by the ABS.

Table 2: Commonwealth general government sector balance sheet

Net worth is calculated as total assets minus total liabilities.
The net worth estimates in this table improve compared to those presented elsewhere in the Budget reflecting the treatment of the GST as a Commonwealth tax.
Net financial worth equals total financial assets minus total liabilities.
Net debt equals the sum of deposits held, advances received, government securities, loans and other borrowings, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

Table 3: Commonwealth general government sector cash flow statement^(a)

Table 3: Commonwealth general government sector cash flow statement(a)

A positive number denotes a cash inflow, a negative sign denotes a cash outflow.
GST flows are excluded from these categories.
The acquisition of assets under finance leases reduces the deficit. The disposal of assets previously held under finance leases improves the surplus/deficit.

Table 4: Commonwealth general government sector statement of other economic flows (reconciliation of net worth)

(a) Includes a reduction in opening net worth for 2002-03 of $2.5 billion due to the adoption of market valuation of debt. This change has been back-cast to 1999-2000, as discussed in Statement 8.

(b) Revaluations and profit on sale of assets are derived from Australian Accounting Standards (AAS) data. Revaluations reflect the difference between the GFS valuation of commercial entities at market value and the AAS valuation at historic cost.

(c) Defence weapons are treated as expenses rather than assets under the GFS framework, hence changes in value do not contribute to net worth and are not included in other economic flows. This component represents the removal of defence weapons included in net writedowns and other movements.

1 Table 2 in Statement 8 shows the difference in the net operating and fiscal balance estimates resulting from the two treatments. The change in expenses when moving between the two GFS presentations of the estimates is less than the change in revenue.