Australian Loan Council Allocation
Under Loan Council arrangements, every year the Australian Government and each State and Territory Government nominate a Loan Council Allocation. A jurisdiction’s Loan Council Allocation incorporates:
- the estimated non-financial public sector underlying cash balance (made up from the general government and public non-financial corporations sector balances);
- net cash flows from investments 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.
Loan Council Allocation 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.
In March 2005, the Australian Government nominated, and the Australian Loan Council endorsed, a Loan Council Allocation surplus of $5,972 million. In the 2005-06 Budget, the Australian Government estimated a Loan Council Allocation surplus of $8,432 million.
Table B11 presents a revised estimate for the Australian Government's 2005-06 Loan Council Allocation of a $9,783 million surplus.
Table B11: Australian Government Loan Council Allocation for 2005-06
- 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.
- For the Australian Government, memorandum items comprise the change in net present value (NPV) of operating leases (with NPV greater than $5 million), and over-funding of superannuation.