Cash flows
The 2007‑08 underlying cash surplus was $19.7 billion, $2.9 billion higher than estimated at the 2008‑09 Budget. The higher than anticipated outcome was the result of lower total cash payments1 of $3.2 billion and lower total cash receipts (excluding Future Fund earnings) of $0.4 billion.
Total cash receipts (including Future Fund earnings) were $294.9 billion in 2007‑08, around $0.7 billion lower than the estimate in the 2008‑09 Budget. This reflected a $0.2 billion decrease in taxation receipts and a $0.5 billion decrease in non‑taxation receipts. The decrease in non‑taxation receipts includes a lower than anticipated outcome for Future Fund earnings of $0.3 billion, which are not included in the underlying cash balance.
Total tax receipts were $160 million below the estimate in the 2008‑09 Budget primarily reflecting lower than expected receipts from company tax of $1.1 billion and GST of $364 million, largely offset by higher than expected receipts from individuals tax of $956 million and superannuation funds tax of $314 million.
GST collections were lower than the estimate in the 2008‑09 Budget reflecting weaker growth in taxable consumption and dwelling investment. The fall in GST receipts was not reflected in accrual revenue because of the recognition of additional accrued revenue in respect of 2007‑08 and earlier income periods.
The smaller decline in company tax receipts relative to its accrual revenue equivalent was mainly due to higher provisions for refunds to taxpayers.
Tax receipts from fringe benefits tax were higher than the accrual revenue equivalent because of a delay in the payment of some refunds into 2008‑09.
Total cash payments were $271.8 billion in 2007‑08, $3.2 billion lower than estimated at the 2008‑09 Budget.2
The difference between the lower than expected cash payments of $3.2 billion and the lower than expected outcome for accrual expenses and net capital investment of $0.7 billion primarily reflects the impact of increases in expenses that do not impact on cash payments, including:
- a change in accounting treatment for concessional loans of $638 million following the review foreshadowed in the 2008‑09 Budget (further details can be found in Part 2). This is offset in part by a variation of $235 million in non‑taxation revenue resulting from this change, leaving a net impact of $403 million;
- higher than expected claims received of $471 million under the Superannuation Co‑contribution scheme owing to a larger than estimated amount of prior year claims being processed late in 2007‑08;
- greater than expected expenses for Fuel Tax Credits of $250 million relating to prior years' claims and growth in fuel consumption for eligible activities; and
- an increase in expenses of $160 million in Family Tax Benefits claimed through the Australian Taxation Office, owing to higher than expected entitlement amounts and take‑up rates.
These increases were partly offset by decreases in expenses that did not impact on cash payments, including:
- lower than estimated civilian superannuation expenses of $268 million primarily driven by the difference in planned asset earnings, discount rate and accrual estimates used to calculate the superannuation expenses and liabilities for outcomes and revised budget estimates; and
- a decrease of $209 million in expenses for the AusLink program mainly owing to an auditing adjustment requiring certain prepayments relating to progress in 2006‑07 to be expensed in that financial year, rather than in 2007‑08 as previously expected.
Table 5: Australian Government general government sector receipts
- The outcome includes Medicare levy receipts of $8,049 million.
- Other excisable beverages are those not exceeding 10 per cent by volume of alcohol.
- Includes Future Fund earnings.
Table 6: Summary of Australian Government general government sector cash flows
- Equivalent to cash receipts from the sale of non‑financial assets in the cash flow statement.
- Equivalent to cash payments for purchases of new and second‑hand non‑financial assets in the cash flow statement.
- 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.
- Excludes Future Fund earnings.
1 Payments are equal to payments for operating activities, purchase of non-financial assets and net acquisition of assets under finance leases.
2 Payments are equal to payments for operating activities, purchase of non-financial assets and net acquisition of assets under finance leases.