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Cash flows

The 2004-05 underlying cash surplus was $13.6 billion, $4.4 billion higher than estimated at the 2005-06 Budget. The higher than anticipated outcome was the result of higher cash receipts of $0.9 billion and lower cash payments of $3.5 billion.

Total Australian Government general government sector cash receipts of $203.6 billion were $0.9 billion (0.4 per cent) higher than estimated at the 2005-06 Budget. The cash receipts outcome reflects:

  • higher than expected company tax receipts of $804 million;
  • higher than expected gross other individuals receipts of $154 million;
  • partially offset by a decrease in non-tax receipts of $161 million due to delays in collections across a number of agencies, including the Department of Defence and Defence Housing Authority.

The higher accrual revenue outcome relative to cash primarily reflects higher tax revenue recognised but not yet received for company tax and gross other individuals heads of revenue.

Total Australian Government general government sector cash payments were $189.9 billion in 2004-05, $3.5 billion (1.8 per cent) lower than estimated at the 2005-06 Budget. This is due mainly to a lower than expected take up of grant and subsidy payments across a range of programmes ($1.3 billion). Also contributing to the underspends were delays in contract negotiations and delivery of goods and services ($0.5 billion), lower wages and salary payments ($0.5 billion), and the rejection by the Tasmanian and South Australian governments of an offer to extinguish state rail superannuation liabilities ($0.4 billion).

Many of these cash variations were also reflected in similar expense and net capital investment variations discussed earlier in this part, with some major differences.

The variations in cash payments that were greater than in accrual expenses include:

  • delayed payments of $454 million across a range of health and veterans’ affairs programmes, including the Medicare Services, National Public Health, and Access to Public Hospitals programmes, and contracts for hospital services for veterans;
  • a decline in cash payments of $411 million due to the rejection by the Tasmanian and South Australian governments of an offer to extinguish state rail superannuation liabilities; and
  • a decline in cash payments of $61 million to suppliers reflecting delays in delivery of explosive ordnance orders to the Department of Defence.

Similarly, variations in accrual expenses and net capital investments that do not affect cash payments include:

  • an increase of $1.0 billion from higher than expected write-offs of tax penalties by the Australian Taxation Office following a review of the collectability of outstanding penalties;
  • an actuarial revaluation of the Department of Defence’s superannuation liabilities, resulting in a $98 million increase in nominal superannuation interest expense; and
  • an increase of $91 million due to increased use of inventories by the Department of Defence reflecting higher levels of activity.

Table 5: Summary of Australian Government general government sector cash flows(a)

Table 5:  Summary of Australian Government general government sector cash flows(a)

  1. Cash flows are derived from the accrual GFS framework excluding GST.
  2. Equivalent to cash receipts from the sale of non-financial assets in the GFS cash flow statement.
  3. Equivalent to cash payments for purchases of new and second-hand non-financial assets in the GFS cash flow statement.
  4. The acquisition of assets under finance leases decreases the underlying cash balance. The disposal of assets previously held under finance leases increases the underlying cash balance.
  5. Under the cash budgeting framework, these cash flows were referred to as net advances.

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