Cash flows
In 2007‑08, the underlying cash balance is expected to be a surplus of $14.8 billion, compared to an estimate of $10.6 billion at the 2007‑08 Budget.
Table 11: Summary of Australian Government general government sector
cash flows ($b)(a)
- Cash flows are derived from the accrual GFS framework excluding GST.
- Equivalent to cash receipts from the sale of non‑finance assets in the GFS cash flow statement.
- Equivalent to cash payments for purchases of new and second‑hand non‑financial assets in the GFS 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.
- Under the cash budgeting framework, these cash flows were referred to as net advances.
- The earnings assume the second instalment of proceeds from Telstra 3 are transferred to the Future Fund. The Fund is assumed to earn a rate of return that exceeds the yield on term deposits held by the Government but reflects an incremental transition to the long term benchmark return specified in the Government's Future Fund investment mandate. The earnings exclude capital gains which are reflected in the statement of other economic flows.
The difference between the higher underlying cash balance of $4.2 billion and the higher fiscal balance of $4.9 billion is primarily due to the change in accounting for education expenses ($554 million) which reduces accrual expenses but not cash, and an increase in earnings of the Future Fund due to the transfer of an additional $7.0 billion from the 2006‑07 surplus which are excluded from the underlying cash balance.
Table 12 provides a reconciliation of the variations in the underlying cash balance estimates.
Table 12: Reconciliation of Australian Government general government sector underlying cash balance estimates
- Excludes expected Future Fund earnings.
- Excludes the public debt net interest effect of policy measures.
Total receipts in 2007‑08 are expected to be $5.8 billion (excluding Future Fund earnings) higher than forecast at the 2007‑08 Budget, comprising $5.0 billion in tax receipts and $877 million in non‑tax receipts. Similar to the revision to the revenue estimates, the revisions to tax receipts are driven by upward revisions to the forecasts of labour market outcomes and company profits, combined with expected stronger growth in realised capital gains and the flow on effects of the higher than expected outcome in 2006‑07.
Table 13: Australian Government general government sector receipts
- The MYEFO estimate includes Medicare levy receipts of $7,820 million in 2007‑08.
- Includes earnings of the Future Fund.