Cash flows

In 2005-06, the underlying cash balance is expected to be a surplus of $11.5 billion compared to an estimate of $8.9 billion at the 2005-06 Budget.

Future Fund earnings are excluded from the underlying cash balance. Projected Future Fund earnings from 2006-07 have increased since the 2005-06 Budget due to the provision of an additional $2 billion of seed capital ($18 billion in total) and the assumption that the gross proceeds from the sale of Telstra will be transferred to the Future Fund.

Table 10: Summary of Australian Government general government sector
cash flows ($b)^(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.
6. The earnings assume the gross proceeds from the sale of Telstra are transferred to the Future Fund. The Future Fund is assumed to earn a rate of return equal to the yield on other term deposits held by the Government.

Major new policy decisions and parameter and other variations since the 2005-06 Budget have largely had the same impact on the 2005-06 underlying cash balance as the fiscal balance.

Table 11 provides a reconciliation of the variations in the underlying cash balance estimates.

Table 11: Reconciliation of Australian Government general government sector
underlying cash balance estimates

1. Excludes the public debt net interest effect of policy measures.