Appendix B: Australian Loan Council Allocation
Under Loan Council arrangements, every year the Commonwealth and each State and Territory government nominate a Loan Council Allocation. A jurisdiction's Loan Council Allocation incorporates:
- the estimated non-financial public sector ABS GFS cash surplus/deficit (made up from the general government and public non-financial corporations sector balances and acquisitions under finance leases and similar arrangements);
- 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 the macroeconomic implications of the aggregate figure.
As set out in Table A1, the Commonwealth's 2008‑09 Loan Council Allocation budget update is a $23,641 million surplus. This compares with its Loan Council Allocation nomination of a $18,974 million surplus endorsed by Loan Council on 14 March 2008.
Table B1: Commonwealth's Loan Council Allocation budget update
for 2008‑09
- Net cash flows from investments in financial assets for policy purposes are displayed with the same sign as which they are reported in cash flow statements. Such transactions involve the transfer or exchange of a financial asset and are not included within the ABS GFS cash surplus/deficit. However, the cash flow from investments in financial assets for policy purposes has implications for a government's call on financial markets.
- For the Commonwealth's Loan Council Allocation, memorandum items include the change in net present value (NPV) of operating leases (with NPV greater than $5 million), the over-funding of superannuation and the net financing requirement of the Australian National University.
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