Attachment B

Budget financial statements

The budget financial statements consist of an operating statement, balance sheet, cash flow statement and statement of other economic flows (reconciliation of net worth) for the Australian Government general government sector. The budget financial statements are based on GFS standards with the exception of the divergences discussed in Attachment A.

Table 13: Australian Government general government sector operating statement

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

Table 14: Australian Government general government sector balance sheet

1. For 2004-05 and forward years, transactions relating to debt management activities in assets — investments, loans and placements and liabilities — government securities have been netted. This treatment has been applied because of the uncertainty associated with the actual split between government securities and financial assets acquired for debt management purposes.
2. Equity includes the valuation of the Telstra shareholding, which is valued at the average of the daily share price over a 90-day period, except in the sale years where the valuation is based on the expected sale price.
3. Net worth is calculated as total assets minus total liabilities.
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 15: 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. 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.

Table 16: Australian Government general government sector statement of other economic flows (reconciliation of net worth)

1. Revaluations of equity reflects changes in the market valuation of commercial entities, including a change in the value of the Telstra shareholding which is valued at the average daily share price over a 90-day period, except in the sale years where the valuation is based on the expected sale price. This line also reflects any equity revaluations at the point of disposal or sale.
2. 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 adjustment to remove defence weapons is allocated to net writedown of assets, assets recognised for the first time and other economic revaluations.
3. Largely reflects revaluations of assets and liabilities.

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