Part 2: Government Finance Statistics Statements

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

The tables include an operating statement, balance sheet and cash flow statement for the Australian Government general government, public non-financial corporations, total non-financial public, and public financial corporations sectors. A statement of other economic flows is also included for the Australian Government general government sector.

The Australian, State and Territory Governments have an agreed framework — the Accrual Uniform Presentation Framework — for the presentation of government financial information on a basis consistent with ABS GFS. This Part presents Australian Government data on an ABS GFS basis, as required by the Accrual Uniform Presentation Framework, except for the general government sector departures detailed in Attachment A to Part 1 (other than in relation to the treatment of goods and services tax (GST)).

The only difference between the Australian Government general government sector statements in Part 1 and this part is the treatment of the GST. The clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations is that GST is collected by the Australian Taxation Office, as an agent for the states and territories (the States), and appropriated to the States. Consequently, it is not shown as Australian Government revenue in other parts of this document. However, the tables in this Part show GST related transactions as taxation revenue and payments to the States as grant expenses.

As a result of the different treatments of GST related transactions, fiscal balance, net operating balance and net worth, estimates in this part differ from those reported elsewhere in this document. This difference 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). The underlying cash balance is not affected and provides identical results under both treatments of GST receipts.

Transactions between the Australian Government general government sector, public financial corporations sector and the public non-financial corporations sectors are included in the relevant tables. These transactions include income transfers (such as dividends paid to general government), net advances paid by general government to public corporations and taxes paid by public corporations.

Public access communication assets, computer software and other intangibles are recorded at historic cost, as market value information, or suitable proxies for market value, are not readily observable. This affects the public non-financial corporations sector balance sheet, but does not affect the general government sector balance sheet.

Table A2 of Appendix A provides reconciliations between key GFS aggregates and their Australian Accounting Standards counterparts.

In accordance with Accrual Uniform Presentation Framework requirements, this Part also contains an update of the Australian Government’s Loan Council Allocation.

Table 11: Australian Government general government sector operating statement

1. The fiscal balance and net operating balance outcomes in this table differ from those presented elsewhere in the Final Budget Outcome reflecting the treatment of the GST as an Australian Government tax.
2. The term fiscal balance is not used by the ABS.

 

Table 12: Australian Government general government sector balance sheet

1. The 2003-04 equity and net worth outcomes include the Telstra shareholding valued at the closing price on 30 June 2004.
2. Heritage and cultural assets were previously included in plant, equipment and infrastructure.
3. The net worth outcome in this table differs from those presented elsewhere in the Final Budget Outcome reflecting the treatment of the GST as an Australian Government tax.
4. Net worth is calculated as total assets minus total liabilities.
5. Net financial worth equals total financial assets minus total liabilities. That is, it excludes non-financial assets.
6. Net debt equals the sum of deposits held, advances received, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

 

Table 13: Australian Government general government sector cash flow statement^(a)

1. A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
2. Includes GST cash receipts on an Australian Government tax basis, which are $126 million lower in 2003-04 than GST cash receipts measured by the Australian Government on a State tax basis (as shown in Part 3, Note 15).
3. GST flows are excluded from these categories.
4. Includes GST cash payments to the states and territories.
5. The acquisition of assets under finance leases decreases the surplus or increases the deficit. The disposal of assets previously held under finance leases increases the surplus or decreases the deficit.

 

Table 14: Australian Government general government sector statement of other economic flows (reconciliation of net worth)

1. Includes the initial recognition of a provision for asbestos disease related claims. At the time of the 2002-03 Final Budget Outcome a reliable actuarial measure was not available. Following an actuarial review a provision for asbestos related claims was included in the audited 2002-03 Consolidated Financial Statements. This liability has now been back-dated to 2002-03.
2. Revaluations of equity for the 2003-04 outcome reflect changes in the market valuation of commercial entities, including a change in the value of Telstra shareholding due to a change in the closing share price between 30 June 2003 and 30 June 2004. This line also reflects any equity revaluations at the point of disposal or sale.
3. 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. The adjustment to remove defence weapons has now been reallocated to net writedowns of assets, assets recognised for the first time and other economic revaluations.
4. Includes the initial recognition of a $944 million provision for claims under the Dairy Structural Adjustment Fund for which a reliable measure is now available. The historical series will be amended at a future date after consultation with the Australian Bureau of Statistics of the appropriate treatment of this liability.
5. Largely reflects revaluations of assets and liabilities.

 

Table 15: Supplementary table — Australian Government general government sector revenue (accrual basis)

1. Includes Medicare levy revenue of $5,560 million in 2003-04.
2. Consistent with GFS reporting standards, excludes fringe benefits tax collected from Australian Government agencies ($365 million in 2003-04).

 

Table 16: Supplementary table — Australian Government general government sector indirect tax (accrual basis)

1. Includes unleaded petrol and lead replacement petrol.
2. Includes aviation gasoline, aviation turbine fuel, fuel oil, heating oil and kerosene.
3. Customs duty includes duties imposed on imported petroleum products, tobacco, beer and spirits, which are analogous to excise duty on these items.
4. Estimates of wine equalisation tax revenue include the offsetting revenue effects of the wine equalisation tax rebate for cellar door and other sales.
5. Wholesale sales tax was abolished on 1 July 2000; however, final liabilities, net of refunds, continue to be recognised.

 

Table 17: Australian Government public non-financial corporations sector operating statement

1. The term fiscal balance is not used by the ABS.

 

Table 18: Australian Government public non-financial corporations sector balance sheet

1. Includes the elimination of commercial taxation adjustments for future income tax benefits and deferred income tax.
2. Net worth is calculated as total assets minus total liabilities minus shares and other contributed capital. The negative net worth recorded for this sector reflects a higher valuation of listed Australian Government corporations by the sharemarket than the value of net assets recorded by these corporations.
3. Net financial worth equals total financial assets minus total liabilities minus shares and other contributed capital. That is, it excludes non-financial assets.
4. 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 19: Australian Government public non-financial corporations sector cash flow statement^(a)

1. A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
2. The acquisition of assets under finance leases decreases the surplus or increases the deficit. The disposal of assets previously held under finance leases increases the surplus or decreases the deficit.

 

Table 20: Australian Government total non-financial public sector operating statement

1. The fiscal balance and net operating balance outcomes differ from those presented elsewhere in the Final Budget Outcome reflecting the treatment of the GST as an Australian Government tax.
2. The term fiscal balance is not used by the ABS.

 

Table 21: Australian Government total non-financial public sector balance sheet

1. Net worth is calculated as total assets minus total liabilities minus shares and other contributed capital. The negative net worth recorded for this sector partly reflects a higher valuation of listed Australian Government corporations by the sharemarket than the value of net assets recorded by these corporations.
2. Net worth and net financial worth for the non-financial public sector now equal the sum of the general government and public non-financial corporations sectors. This is due to the elimination of commercial taxation adjustments for future income tax benefits and deferred income tax now being made within the public non-financial corporations sector.
3. Net financial worth equals total financial assets minus total liabilities minus shares and other contributed capital. That is, it excludes non-financial assets.
4. Net debt equals the sum of deposits held, advances received, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

 

Table 22: Australian Government total non-financial public sector cash flow statement^(a)

1. A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
2. GST flows are excluded from these categories.
3. Distributions paid comprise non-financial public sector dividends to external shareholders.
4. The acquisition of assets under finance leases decreases the surplus or increases the deficit. The disposal of assets previously held under finance leases increases the surplus or decreases the deficit.

 

Table 23: Australian Government public financial corporations sector operating statement

1. The term fiscal balance is not used by the ABS.

 

Table 24: Australian Government public financial corporations sector balance sheet

1. Includes the elimination of commercial taxation adjustments for future income tax benefits and deferred income tax.
2. Net worth is calculated as total assets minus total liabilities minus shares and other contributed capital.
3. Net financial worth equals total financial assets minus total liabilities minus shares and other contributed capital. That is, it excludes non-financial assets.
4. 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 25: Australian Government public financial corporations sector cash flow statement^(a)

1. A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
2. The acquisition of assets under finance leases decreases the surplus or increases the deficit. The disposal of assets previously held under finance leases increases the surplus or decreases the deficit.

 

Table 26: Australian Government general government sector purchases of non-financial assets by function

 

Attachment A

Loan Council Allocation

Under the Loan Council arrangements, every year the Australian Government and each State nominates a Loan Council Allocation (LCA). A jurisdiction’s LCA incorporates:

• the estimated non-financial public sector cash deficit/surplus (underlying cash balance), made up from the general government and public non-financial corporations sector balances;
• net cash flows from investment in financial assets for policy purposes; and
• memorandum items, which involve transactions that are not formally borrowings but nevertheless have many of the characteristics of borrowings.

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 the aggregate figure.

As set out in Table 27, the Australian Government’s 2003-04 LCA outcome is a $7,708 million surplus. This compares with the Australian Government’s 2003-04 Budget estimate of a $2,159 million surplus. The LCA outcome exceeds the upper bound of the LCA Budget estimate by more than the 2 per cent tolerance limit. A tolerance limit of 2 per cent of non-financial public sector receipts applies between the LCA Budget update and the outcome. Tolerance limits recognise that LCAs are nominated at an early stage of the budget process and may change as a result of policy and parameter changes.

Table 27: Australian Government Loan Council Allocation

1. Such transactions involve the transfer or exchange of a financial asset and are not included within the cash deficit/surplus. However, the cash flow from investments in financial assets for policy purposes has implications for a government’s call on financial markets.
2. For the Australian Government, memorandum items comprise the change in the net present value (NPV) of operating leases (with NPV greater than $5 million), overfunding of superannuation and an adjustment to exclude Telstra’s net financing requirement.