Section 5: Budgeted financial statements

5.1: Analysis of budgeted financial statements

A brief analysis of the Treasury’s budgeted financial statements is provided below.

Departmental

The Treasury is budgeting towards a breakeven operating result for 2005-06.

The Treasury will receive additional revenues in 2005-06 of $10.3 million. This increase mainly relates to new funding provided to the Treasury for previous and new Budget measures, and other minor variations.

The Treasury has a sound financial position and currently has sufficient cash to fund provisions and payables, and asset replacement, as they fall due.

Administered

For constitutional reasons the goods and services tax (GST) is levied by the Australian Government, and can therefore be technically considered Australian Government revenue under the reporting standards. The clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, however, is that it is a State tax collected by the Australian Government in an agency capacity. Accordingly, GST related items recorded in the Treasury’s administered budget statements, fully offset GST related items recorded by the Australian Taxation Office so that at a consolidated level the GST is not recorded by the Australian Government.

5.2: Budgeted financial statements tables

Table 5.1: Budgeted departmental statement of financial performance
for the period ended 30 June

Table 5.2: Budgeted departmental statement of financial position
as at 30 June

* ‘Equity’ is the residual interest in assets after deduction of liabilities.

Table 5.3: Budgeted departmental statement of cash flows
for the period ended 30 June

Table 5.4: Departmental capital budget statement

Table 5.5: Departmental property, plant, equipment and intangibles — summary of movement (Budget year 2005‑06)

Table 5.6: Schedule of budgeted revenues and expenses administered on behalf of Government for the period ended 30 June

Table 5.7: Schedule of budgeted assets and liabilities administered on behalf of Government as at 30 June

Table 5.8: Schedule of budgeted administered cash flows
for the period ended 30 June

Table 5.9: Schedule of administered capital budget

Table 5.10: Schedule of property, plant, equipment and intangibles — summary of movement (Budget Year 2005‑06)

This table is not applicable to the Treasury.

5.3: Notes to the financial statements

Basis of accounting

The Treasury’s budget statements have been prepared on an accrual basis and in accordance with the goods and services tax (GST) accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable be reported gross. Appropriations are thus net of recoverable GST amounts.

Departmental and administered financial statements

Under the Australian Government’s accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that departments control (departmental transactions) are separately budgeted for and reported on from transactions departments do not have control over (administered transactions). This ensures that departments are only held accountable for the transactions over which they have control.

Departmental assets, liabilities, revenues and expenses are those items that are controlled by the department. Departmental expenses include employee and supplier expenses and other administrative costs, which are incurred by the department in providing its goods and services.

Administered items are revenues, expenses, assets or liabilities which are managed by the department on behalf of the Australian Government according to set government directions. Administered expenses include subsidies, grants, and personal benefit payments and administered revenues include taxes, fees, fines and excises.

Royal Australian Mint

The Treasury’s departmental budget statements are aggregated to include the financial operations of the Royal Australian Mint (the Mint). Any profit earned by the Mint, taking into account working capital requirements, is returned to the Australian Government.

Seigniorage is collected by the Mint on behalf of the Australian Government. Seigniorage represents the difference between the face value of coinage sold to the Reserve Bank of Australia and its cost of production to the Mint. Seigniorage is treated as an administered item within the Treasury’s administered budget statements.

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