APPENDIX B: AUSTRALIAN GOVERNMENT BUDGET
FINANCIAL STATEMENTS
The Mid-Year Economic and Fiscal Outlook (MYEFO) financial statements consist of
an operating statement, including other economic flows, a balance sheet, and a cash
flow statement for the Australian Government general government sector (GGS), the
public non-financial corporations sector (PNFC) and the total non-financial public
sector (NFPS). This statement also contains notes showing disaggregated information
for the GGS.
The Charter of Budget Honesty Act 1998 (the Charter) requires that MYEFO be based on
external reporting standards and for departures from these standards to be disclosed.
The Government has produced financial statements that comply with both Australian
Bureau of Statistics’ (ABS) accrual Government Finance Statistics (GFS) and Australian
Accounting Standards (AAS), meeting the requirement of the Charter, with departures
disclosed. The statements for MYEFO have been prepared on a consistent basis with
the 2011-12 Budget. The statements reflect the Government’s accounting policy that
ABS GFS remains the basis of budget accounting policy, except where the Government
applies AAS because it provides a better conceptual basis for presenting information of
relevance to users of public sector financial reports.
The Australian, State and Territory governments have an agreed framework — the
Accrual Uniform Presentation Framework (UPF) — for the presentation of government
financial information on a basis broadly consistent with the Australian Accounting
Standards Board standard AASB 1049. The MYEFO financial statements are consistent
with the requirements of the UPF.
In accordance with the UPF requirements, this statement also contains an update of the
Australian Government’s Loan Council Allocation.
303
Appendix B: Australian Government budget financial statements
AUSTRALIAN GOVERNMENT FINANCIAL STATEMENTS
Table B1: Australian Government general government sector operating
statement
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
3
4
5
5
6
323,631
8,050
5,190
1,652
5,587
344,110
361,679
8,295
5,417
1,786
5,587
382,764
385,879
8,561
5,463
1,931
5,709
407,542
406,890
8,256
5,258
1,954
5,793
428,151
7
7
8
9
7
19,374
4,177
5,733
70,425
4,624
104,333
7,351
12,983
18,707
3,376
5,956
70,092
4,630
102,761
7,886
13,680
18,930
3,412
6,110
74,244
4,769
107,465
8,141
14,165
19,176
3,382
6,294
78,855
4,760
112,467
8,398
14,128
111,799
9,782
110,787
232,368
117,859
12,808
115,488
246,156
123,587
14,794
121,805
260,187
132,616
14,946
129,837
277,400
2,267
12,445
14,712
371,747
2,403
7,049
9,451
379,935
2,549
8,116
10,666
400,623
2,696
3,775
6,471
418,863
-27,637
2,829
6,919
9,288
-1,875
7,889
3,508
3,647
-5,376
517
-819
-527
45
-7,628
-84
-15,747
-5,887
544
0
26
0
1,352
-337
3,587
-6,284
574
0
871
0
1,182
-14
-163
-6,641
609
0
68
0
973
450
-894
-43,383
6,415
6,756
8,394
Note
Revenue
Taxation revenue
Sales of goods and services
Interest income
Dividend income
Other
Total revenue
Expenses
Gross operating expenses
Wages and salaries(a)
Superannuation
Depreciation and amortisation
Supply of goods and services
Other operating expenses(a)
Total gross operating expenses
Superannuation interest expense
Interest expenses
Current transfers
Current grants
Subsidy expenses
Personal benefits
Total current transfers
Capital transfers
Mutually agreed write-downs
Other capital grants
Total capital transfers
Total expenses
7
10
11
12
11
Net operating balance
Other economic flows
Gain/loss on equity and on sale of assets(b)
Net write-downs of assets
(including bad and doubtful debts)
Assets recognised for the first time
Actuarial revaluations
Net foreign exchange gains
Net swap interest received
Market valuation of debt
Other economic revaluations(c)
Total other economic flows
Comprehensive result Total change in net worth
13
304
Appendix B: Australian Government budget financial statements
Table B1: Australian Government general government sector operating
statement (continued)
Note
Net operating balance
Net acquisition of non-financial assets
Purchases of non-financial assets
less Sales of non-financial assets
less Depreciation
plus Change in inventories
plus Other movements in non-financial assets
Total net acquisition of
non-financial assets
Fiscal balance (Net lending/borrowing)(d)
Estimates
2011-12
2012-13
$m
$m
-27,637
2,829
Projections
2013-14
2014-15
$m
$m
6,919
9,288
10,013
612
5,733
638
508
8,846
5,104
5,956
537
-208
8,730
403
6,110
532
10
8,899
235
6,294
458
65
4,813
-1,885
2,760
2,893
-32,450
4,714
4,159
6,395
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other
operating expenses. Total employee expenses equal wages and salaries plus other operating expenses.
(b) Reflects changes in the market valuation of investments and any revaluations at the point of disposal or
sale.
(c) Largely reflects other revaluation of assets and liabilities.
(d) The term fiscal balance is not used by the ABS.
305
Appendix B: Australian Government budget financial statements
Table B2: Australian Government general government sector balance sheet
Note
Assets
Financial assets
Cash and deposits
Advances paid
Investments, loans and placements
Other receivables
Equity investments
Investments in other public sector entities
Equity accounted investments
Investments - shares
Total financial assets
Projections
2013-14
2014-15
$m
$m
2,484
29,790
97,990
37,011
2,511
32,683
106,868
40,720
2,673
36,611
106,582
42,336
2,460
40,757
108,448
44,929
21,858
318
29,110
218,560
26,425
318
31,781
241,305
33,040
319
35,299
256,861
37,129
321
38,389
272,434
8,661
23,094
52,696
7,031
5,224
316
36
9,498
148
3,196
109,901
328,461
8,595
23,953
54,178
7,204
5,388
316
36
9,511
148
3,022
112,350
353,655
8,531
24,352
56,039
7,328
5,326
316
36
9,523
148
3,058
114,656
371,517
8,588
24,255
58,003
7,357
5,582
316
36
9,536
148
3,166
116,987
389,421
209
253,455
8,357
796
262,816
209
262,296
11,755
1,093
275,353
209
268,157
11,760
1,453
281,579
209
272,424
11,789
1,351
285,773
133,487
11,539
4,478
13,165
2,292
10,618
12,394
187,973
450,789
137,995
11,806
4,428
14,138
2,881
10,914
12,053
194,215
469,568
142,565
12,122
4,487
14,428
3,145
9,759
12,588
199,095
480,674
147,196
12,311
4,493
14,984
3,268
8,657
13,503
204,411
490,184
Net worth(a)
-122,328
-115,913
-109,157
-100,763
Net financial worth(b)
Net financial liabilities(c)
Net debt(d)
-232,229
254,087
132,552
-228,263
254,688
133,292
-223,813
256,854
135,713
-217,750
254,880
134,108
Non-financial assets
Land
Buildings
Plant, equipment and infrastructure
Inventories
Intangibles
Investment properties
Biological assets
Heritage and cultural assets
Assets held for sale
Other non-financial assets
Total non-financial assets
Total assets
Liabilities
Interest bearing liabilities
Deposits held
Government securities
Loans
Other borrowing
Total interest bearing liabilities
Provisions and payables
Superannuation liability
Other employee liabilities
Suppliers payable
Personal benefits provisions and payable
Subsidies provisions and payable
Grants provisions and payable
Other provisions and payables
Total provisions and payables
Total liabilities
20(a)
14
15
14
Estimates
2011-12
2012-13
$m
$m
16
17
18
18
19
19
19
19
19
(a) Net worth is calculated as total assets minus total liabilities.
(b) Net financial worth equals total financial assets minus total liabilities.
(c) Net financial liabilities equals total liabilities less financial assets other than investments in other public
sector entities.
(d) Net debt equals the sum of deposits held, government securities, loans and other borrowing, minus the
sum of cash and deposits, advances paid, and investments, loans and placements.
306
Appendix B: Australian Government budget financial statements
Table B3: Australian Government general government sector cash flow
statement(a)
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
Cash receipts from operating activities
Taxes received
Receipts from sales of goods and services
Interest receipts
Dividends and income tax equivalents
Other receipts
Total operating receipts
315,299
7,970
4,902
2,233
5,417
335,820
349,161
8,218
4,951
1,785
5,340
369,455
375,458
8,523
4,942
1,930
5,378
396,231
395,493
8,191
4,617
1,953
5,469
415,724
Cash payments for operating activities
Payments for employees
Payments for goods and services
Grants and subsidies paid
Interest paid
Personal benefit payments
Other payments
Total operating payments
-26,171
-71,140
-137,057
-10,775
-110,299
-4,522
-359,963
-25,428
-70,337
-135,063
-11,753
-114,526
-4,339
-361,447
-25,863
-74,405
-144,893
-11,721
-121,504
-4,491
-382,878
-26,270
-79,106
-149,344
-11,948
-129,286
-4,566
-400,519
Net cash flows from operating activities
-24,143
8,008
13,353
15,205
Cash flows from investments in
non-financial assets
Sales of non-financial assets
Purchases of non-financial assets
Net cash flows from investments in
non-financial assets
612
-10,009
5,104
-8,218
403
-8,249
235
-8,956
-9,397
-3,114
-7,847
-8,721
-9,677
-10,867
-9,073
-7,558
1,475
-3,028
-1,959
-3,483
Net cash flows from investments in
financial assets for policy purposes
Cash flows from investments in
financial assets for liquidity purposes
Increase in investments
Net cash flows from investments in
financial assets for liquidity purposes
1,475
-3,028
-1,959
-3,483
Cash receipts from financing activities
Borrowing
Total cash receipts from financing activities
43,688
43,688
10,343
10,343
7,057
7,057
5,435
5,435
Cash payments for financing activities
Other financing
Total cash payments for financing activities
-1,939
-1,939
-1,314
-1,314
-1,370
-1,370
-1,091
-1,091
Net cash flows from financing activities
41,749
9,028
5,687
4,344
7
27
162
-213
Net increase/(decrease) in cash held
307
Appendix B: Australian Government budget financial statements
Table B3: Australian Government general government sector cash flow
statement (continued)(a)
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
Net cash flows from operating activities
and investments in non-financial assets
(surplus(+)/deficit(-))
-33,540
4,894
5,506
6,484
Finance leases and similar arrangements(b)
-117
-404
-469
0
GFS cash surplus(+)/deficit(-)
-33,658
4,490
5,038
6,484
less Future Fund earnings
3,455
3,011
3,174
3,376
-37,113
1,479
1,864
3,108
Equals underlying cash balance(c)
plus Net cash flows from investments in
financial assets for policy purposes
-9,677
-10,867
-9,073
-7,558
plus Future Fund earnings
3,455
3,011
3,174
3,376
-43,334
-6,377
-4,035
-1,074
Equals headline cash balance
(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
(b) 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.
(c) The term underlying cash balance is not used by the ABS.
308
Appendix B: Australian Government budget financial statements
Table B4: Australian Government public non-financial corporations sector
operating statement
Estimates
2011-12
$m
Revenue
Current grants and subsidies
Sales of goods and services
Interest income
Other
Total revenue
16
7,779
83
2
7,880
Expenses
Gross operating expenses
Wages and salaries(a)
Superannuation
Depreciation and amortisation
Supply of goods and services
Other operating expenses(a)
Total gross operating expenses
Interest expenses
Other property expenses
Current transfers
Tax expenses
Total current transfers
Total expenses
2,945
250
561
3,686
404
7,846
99
227
62
62
8,235
Net operating balance
-355
Other economic flows
-619
Comprehensive result - Total change in net worth
excluding contribution from owners
-974
Net acquisition of non-financial assets
Purchases of non-financial assets
less Sales of non-financial assets
less Depreciation
plus Change in inventories
plus Other movements in non-financial assets
Total net acquisition of non-financial assets
3,590
114
561
22
283
3,219
Fiscal balance (Net lending/borrowing)(b)
-3,575
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other
operating expenses. Total employee expenses equal wages and salaries plus other operating expenses.
(b) The term fiscal balance is not used by the ABS.
309
Appendix B: Australian Government budget financial statements
Table B5: Australian Government public non-financial corporations sector
balance sheet
Estimates
2011-12
$m
Assets
Financial assets
Cash and deposits
Investments, loans and placements
Other receivables
Equity investments
Total financial assets
Non-financial assets
Land and fixed assets
Other non-financial assets(a)
Total non-financial assets
Total assets
2,549
342
998
320
4,209
10,720
896
11,617
15,826
Liabilities
Interest bearing liabilities
Borrowing
Total interest bearing liabilities
Provisions and payables
Other employee liabilities
Other provisions and payables(a)
Total provisions and payables
Total liabilities
2,178
2,178
1,229
2,236
3,465
5,644
Shares and other contributed capital
10,182
Net worth(b)
10,182
Net financial worth(c)
-1,434
Net debt(d)
-713
(a) Excludes the impact of commercial taxation adjustments.
(b) Under AASB 1049, net worth is calculated as total assets minus total liabilities. Under ABS GFS, net
worth is calculated as total assets minus total liabilities minus shares and other contributed capital. The
AASB 1049 method is used in this table.
(c) Under AASB 1049, net financial worth equals total financial assets minus total liabilities. Under
ABS GFS, net financial worth equals total financial assets minus total liabilities minus shares and other
contributed capital. The AASB 1049 method is used in this table.
(d) Net debt equals the sum of interest bearing liabilities (deposits held, advances received and borrowing),
minus the sum of cash and deposits and investments, loans and placements.
310
Appendix B: Australian Government budget financial statements
Table B6: Australian Government public non-financial corporations sector cash
flow statement(a)
Estimates
2011-12
$m
Cash receipts from operating activities
Receipts from sales of goods and services
GST input credit receipts
Other receipts
Total operating receipts
8,661
82
133
8,876
Cash payments for operating activities
Payments to employees
Payment for goods and services
Interest paid
GST payments to taxation authority
Other payments
Total operating payments
-3,764
-4,186
-87
-239
-100
-8,376
Net cash flows from operating activities
500
Cash flows from investments in non-financial assets
Sales of non-financial assets
Purchases of non-financial assets
Net cash flows from investments in non-financial assets
Cash flows from investments in financial assets
for liquidity purposes
Increase in investments
Net cash flows from investments in financial assets
for liquidity purposes
Net cash flows from financing activities
Borrowing (net)
Other financing (net)
Distribution paid (net)
Net cash flows from financing activities
158
-3,873
-3,715
137
137
764
3,557
-244
4,077
Net increase/(decrease) in cash held
999
Cash at the beginning of the year
Cash at the end of the year
1,551
2,549
Net cash from operating activities and investments in
non-financial assets
-3,215
Distributions paid
-244
Equals surplus(+)/deficit(-)
-3,459
Finance leases and similar arrangements(b)
0
GFS cash surplus(+)/deficit(-)
-3,459
(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
(b) The acquisition of assets under finance leases decreases the surplus or increases the deficit. The
disposal of assets previously held under finance leases increases the surplus or decreases the deficit.
311
Appendix B: Australian Government budget financial statements
Table B7: Australian Government total non-financial public sector operating
statement
Estimates
2011-12
$m
Revenue
Taxation revenue
Sales of goods and services
Interest income
Dividend income
Other
Total revenue
323,569
14,628
5,244
1,424
5,589
350,454
Expenses
Gross operating expenses
Wages and salaries(a)
Superannuation
Depreciation and amortisation
Supply of goods and services
Other operating expenses(a)
Total gross operating expenses
Superannuation interest expense
Interest expenses
Current transfers
Current grants
Subsidy expenses
Personal benefits
Total current transfers
Capital transfers
Total expenses
22,319
4,427
6,294
72,909
5,028
110,977
7,351
13,054
111,799
9,766
110,787
232,352
14,712
378,446
Net operating balance
-27,992
Other economic flows
-14,218
Comprehensive result - Total change in net worth
-42,210
Net acquisition of non-financial assets
Purchases of non-financial assets
less Sales of non-financial assets
less Depreciation
plus Change in inventories
plus Other movements in non-financial assets
Total net acquisition of non-financial assets
13,603
726
6,294
660
790
8,033
Fiscal balance (net lending/borrowing)(b)
-36,025
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other
operating expenses. Total employee expenses equal wages and salaries plus other operating expenses.
(b) The term fiscal balance is not used by the ABS.
312
Appendix B: Australian Government budget financial statements
Table B8: Australian Government total non-financial public sector balance sheet
Estimates
2011-12
$m
Assets
Financial assets
Cash and deposits
Advances paid
Investments, loans and placements
Other receivables
Equity investments
Total financial assets
Non-financial assets
Land and fixed assets
Other non-financial assets
Total non-financial assets
Total assets
5,033
29,790
98,050
37,865
41,992
212,730
111,700
9,817
121,518
334,248
Liabilities
Interest bearing liabilities
Deposits held
Government securities
Loans
Other borrowing
Total interest bearing liabilities
Provisions and payables
Superannuation liability
Other employee liabilities
Other provisions and payables
Total provisions and payables
Total liabilities
209
253,455
8,075
2,975
264,713
133,487
12,767
45,040
191,294
456,007
Shares and other contributed capital
10,182
Net worth(a)
-121,759
Net financial worth(b)
-243,277
Net debt(c)
131,839
(a) Under AASB 1049, net worth is calculated as total assets minus total liabilities. Under ABS GFS, net
worth is calculated as total assets minus total liabilities minus shares and other contributed capital. The
AASB 1049 method is used in this table.
(b) Under AASB 1049, net financial worth equals total financial assets minus total liabilities. Under ABS
GFS, net financial worth equals total financial assets minus total liabilities minus shares and other
contributed capital. The AASB 1049 method is used in this table.
(c) Net debt equals the sum of deposits held, government securities, loans and other borrowing, minus the
sum of cash and deposits, advances paid, and investments, loans and placements.
313
Appendix B: Australian Government budget financial statements
Table B9: Australian total non-financial public sector cash flow statement(a)
Estimates
2011-12
$m
Cash receipts from operating activities
Taxes received
Receipts from sales of goods and services
Interest receipts
Dividends and income tax equivalents
Other receipts
Total operating receipts
315,207
14,634
4,957
2,006
5,449
342,252
Cash payments for operating activities
Payments to employees
Payments for goods and services
Grants and subsidies paid
Interest paid
Personal benefit payments
Other payments
Total operating payments
Net cash flows from operating activities
-29,935
-73,485
-137,057
-10,833
-110,299
-4,529
-366,138
-23,887
Cash flows from investments in non-financial assets
Sales of non-financial assets
Purchases of non-financial assets
Net cash flows from investments in non-financial assets
Net cash flows from investments in financial assets
for policy purposes
Cash flows from investments in financial assets
for liquidity purposes
Increase in investments
Net cash flows from investments in financial assets
for liquidity purposes
Net cash flows from financing activities
Borrowing (net)
Other financing (net)
Net cash flows from financing activities
770
-13,882
-13,112
-9,677
5,109
5,109
44,453
-1,880
42,573
Net increase/(decrease) in cash held
1,006
Cash at the beginning of the year
Cash at the end of the year
4,028
5,033
Net cash from operating activities and investments
in non-financial assets
-36,999
Distributions paid
0
Equals surplus(+)/deficit(-)
-36,999
Finance leases and similar arrangements(b)
-117
GFS cash surplus(+)/deficit(-)
-37,116
(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
(b) The acquisition of assets under finance leases decreases the surplus or increases the deficit. The
disposal of assets previously held under finance leases increases the surplus or decreases the deficit.
314
Appendix B: Australian Government budget financial statements
NOTES TO THE GENERAL GOVERNMENT SECTOR FINANCIAL
STATEMENTS
Note 1: External reporting standards and accounting policies
The Charter of Budget Honesty Act 1998 (the Charter) requires that the Mid-Year
Economic and Fiscal Outlook (MYEFO) be based on external reporting standards and
that departures from applicable external reporting standards be identified.
The major external standards used for MYEFO reporting purposes are:
• the Australian Bureau of Statistics’ (ABS) accrual Government Finance Statistics
(GFS) publication, Australian System of Government Finance Statistics: Concepts,
Sources and Methods, 2005 (cat. no. 5514.0), which in turn is based on the
International Monetary Fund (IMF) accrual GFS framework; and
• Australian Accounting Standards (AAS), being AASB 1049 Whole of Government and
General Government Sector Financial Reporting (AASB 1049) and other applicable
Australian Equivalents to International Financial Reporting Standards (AEIFRS).
As required by the Charter, the financial statements have been prepared on an accrual
basis that complies with both ABS GFS and AAS except for departures disclosed at
Note 2.
A more detailed description of the AAS and ABS GFS frameworks, in addition to
definitions of key terms used in these frameworks, can be found in Attachment A.
Table B11 in Attachment A explains the key differences between the two frameworks.
Detailed accounting policies, as required by AAS, are disclosed in the annual
consolidated financial statements.
Budget reporting focuses on the general government sector (GGS). The GGS provides
public services that are mainly non-market in nature and for the collective
consumption of the community, or involve the transfer or redistribution of income.
These services are largely financed through taxes and other compulsory levies, user
charging and external funding. This sector comprises all government departments,
offices and some other bodies. In preparing financial statements for the GGS, all
material transactions and balances between entities within the GGS have been
eliminated. A list of entities within the GGS, as well as entities within and a description
of the public non-financial corporations (PNFC) sector and public financial
corporations (PFC) sector, are disclosed in Table B10 in Attachment A.
The Government’s key fiscal aggregates are based on ABS GFS concepts and
definitions, including the ABS GFS cash surplus/deficit and the derivation of the
underlying cash balance and net financial worth. AASB 1049 requires the disclosure of
other ABS GFS fiscal aggregates, including net operating balance, net
lending/borrowing (fiscal balance) and net worth. In addition to the ABS GFS
315
Appendix B: Australian Government budget financial statements
aggregates, the Accrual Uniform Presentation Framework (UPF) requires net debt, net
financial worth and net financial liabilities.
Comprehensive guidance has not been issued under either Australian Accounting
Standards or Government Finance Statistics for the measurement of accrual revenue
and expenses under the carbon price. Current estimates measure revenue and
expenses at the market price for carbon in the year that emissions occur. Finance and
Treasury will continue to review this treatment in consultation with the ABS and the
Australian National Audit Office (ANAO).
Note 2: Departures from external reporting standards
The Charter requires that departures from applicable external reporting standards be
identified. The MYEFO financial statements depart from the external reporting
standards as follows.
General government sector
Departures from ABS GFS
ABS GFS requires that provisions for bad and doubtful debts be excluded from the
balance sheet. This treatment has not been adopted in the financial statements or in
any reconciliation notes because excluding such provisions would overstate the value
of Australian Government assets in the balance sheet. The financial statements
currently adopt AAS treatment for provisions for bad and doubtful debts.
ABS GFS treats coins on issue as a liability and no revenue is recognised. The ABS GFS
treatment of circulating coins as a liability has not been adopted in the financial
statements or in any reconciliation notes. Instead, the financial statements adopt AAS
treatment for circulating coins (seigniorage). Under this treatment seigniorage revenue
is recognised upon the issue of coins and no liability is recorded.
Under ABS GFS prepayments are classified as financial assets. In accordance with
AAS, prepayments have been classified as non-financial assets in the financial
statements. This is a classification difference that impacts on net financial worth.
ABS GFS records defence weapons platforms (DWP) as a non-financial asset on a
market value basis (fair value), rather than expensing at time of acquisition. The value
used by ABS is consistent with the National Accounts statistical methodology, and
represents an early adoption of changes to the System of National Accounts 2008. ABS
GFS treatment of DWP is consistent with AAS, as non-financial assets can be valued at
fair value as long as they can be reliably measured, otherwise cost is permissible. DWP
will be valued at cost in the budget financial statements, as they have in previous
budgets, while the Australian Government ascertains if a relevant and reliable fair
value can be sourced.
316
Appendix B: Australian Government budget financial statements
Under ABS GFS, concessional loans are recognised at their nominal value, that is, they
are not discounted to fair (market) value as there is not considered to be a secondary
market. This treatment has not been adopted for the financial statements. Consistent
with AAS, loans issued at below market interest rates or with long repayment periods
are recorded at fair value (by discounting them by market interest rates). The
difference between the nominal value and the fair value of the loan is recorded as an
expense. Over the life of the loan the interest earned is recognised at market rates.
ABS GFS requires investments in unlisted public sector entities to be valued based on
their net assets. Under AAS, investments in public sector entities can be valued at fair
value as long as a fair value can be reliably measured, otherwise net assets is
permissible. The AAS treatment has been adopted in the financial statements.
Movements in the provision for restoration, decommissioning and make-good of assets
have been included in the calculation of the fiscal balance capital adjustment because
in many cases they involve legal obligations to expend resources. ABS GFS does not
recognise adjustments for such provisions because they are considered a constructive
obligation that may not materialise for many years.
Departures from AASB 1049
AAS requires the advances paid to the International Development Association and
Asian Development Fund to be recognised at fair value. Under ABS GFS these
advances are recorded at nominal value. ABS GFS treatment is adopted in the financial
statements.
AASB 1049 requires the disclosure of the operating result and its derivation on the face
of the operating statement. However, as this aggregate is not used by the Australian
Government (and is not required by the UPF), it has been disclosed in Note 13 rather
than on the face of the operating statement.
AASB 1049 requires disaggregated information, by ABS GFS function, for expenses
and total assets to be disclosed where they are reliably attributable. ABS GFS does not
require total assets attributed to functions. In accordance with ABS GFS, disaggregated
information for expenses and net acquisition of non-financial assets by function is
disclosed in Attachment C of Part 3. In accordance with the UPF, purchases of
non-financial assets by function are also disclosed.
AASB 1049 requires AAS measurement of items to be disclosed on the face of the
financial statements with reconciliation to ABS GFS measurement of items, where
different, in notes to the financial statements. Reconciliation notes have not been
included as they would effectively create two measures of the same aggregate.
AASB 1049 requires major variances between original budget estimates and outcomes
to be explained in the financial statements. Explanations of variances for the 2011-12
year from the 2011-12 Budget are disclosed in Part 3. All decisions taken between the
2011-12 Budget and MYEFO are disclosed in Appendix A.
317
Appendix B: Australian Government budget financial statements
In addition to above adjustments, there are specific adjustments made to the
corporations sectors as outlined below.
Public non-financial corporations (PNFC) sector and total non-financial
public sector (NFPS)
Departures from ABS GFS
AASB 1049 defines net worth for the PNFC sector and NFPS as total assets less total
liabilities, however ABS GFS defines net worth as total assets less total liabilities less
shares and contributed capital (which is equal to zero for the PNFC sector). Similarly,
AASB1049 defines net financial worth for these sectors as financial assets less total
liabilities, whereas under ABS GFS it is equal to financial assets less total liabilities less
shares and contributed capital. The AASB 1049 treatment has been adopted in the
PNFC and NFPS sector financial statements.
Departures from AASB 1049
The financial statements for the PNFC sector and NFPS comply with the UPF but do
not include all the line item disclosures required by AASB 1049. Disaggregated
outcome notes for the PNFC sector will be disclosed in the consolidated financial
statements.
AAS requires dividends paid to be classified as a distribution of equity. Under ABS
GFS, dividends paid are classified as an expense. ABS GFS treatment has been adopted
for use in the financial statements.
Australian government public corporations use commercial tax effect accounting to
determine their net tax liability while the ATO determines their tax liability on a due
and payable basis. To ensure symmetry in treatment between Australian governments
sectors the ABS remove tax effect adjustments. The GFS treatment has been adopted in
the financial statements.
318
Appendix B: Australian Government budget financial statements
Note 3: Taxation revenue by type
Income taxation
Individuals and other withholding taxes
Gross income tax withholding
Gross other individuals
less Refunds
Total individuals and other withholding taxation
Fringe benefits tax
Company tax
Superannuation funds
Resource rent taxes(a)
Total income taxation revenue
Indirect taxation
Sales taxes
Goods and services tax
Wine equalisation tax
Luxury car tax
Total sales taxes
Excise duty
Petrol
Diesel
Beer
Tobacco
Other excisable products
Of which: Other excisable beverages(b)
Total excise duty revenue
Customs duty
Textiles, clothing and footwear
Passenger motor vehicles
Excise-like goods
Other imports
less Refunds and drawbacks
Total customs duty revenue
Carbon pricing mechanism(c)
Other indirect taxation
Agricultural levies
Other taxes
Total other indirect taxation revenue
Mirror taxes
less Transfers to States in relation to
mirror tax revenue
Mirror tax revenue
Total indirect taxation revenue
Total taxation revenue
Memorandum:
Capital gains tax
Medicare levy revenue
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
143,520
32,910
26,600
149,830
3,530
71,800
8,990
2,030
236,180
151,190
37,350
27,200
161,340
3,870
77,620
10,060
8,000
260,890
164,170
40,240
28,000
176,410
4,360
79,690
11,100
8,400
279,960
176,050
44,080
30,700
189,430
4,760
83,050
12,220
6,700
296,160
49,750
750
480
50,980
53,560
790
510
54,860
56,620
830
540
57,990
59,410
880
570
60,860
6,080
7,980
2,050
6,250
4,600
950
26,960
5,800
8,480
2,200
6,250
5,150
1,000
27,880
5,140
8,900
2,300
5,600
5,400
1,050
27,340
5,660
9,000
2,400
5,770
5,650
1,100
28,480
650
750
4,000
1,460
120
6,740
-
700
700
4,250
1,710
120
7,240
7,690
750
750
5,490
1,810
120
8,680
8,610
600
800
5,610
1,910
120
8,800
9,200
427
2,344
2,771
432
2,687
3,119
424
2,875
3,299
429
2,961
3,390
461
492
523
545
461
0
492
0
523
0
545
0
87,451
100,789
105,919
110,730
323,631
361,679
385,879
406,890
7,300
8,930
11,000
9,620
14,300
10,270
16,400
10,940
(a) Resource rent taxes include the PRRT and gross revenue from the MRRT. The net revenue from the MRRT is
$3.7 billion in 2012-13, $3.8 billion in 2013-14 and $3.1 billion in 2014-15, which represents the net impact on
revenue across several different revenue heads. This includes the offsetting reductions in company tax (through
deductibility) and interactions with other taxes.
(b) Other excisable beverages are those not exceeding 10 per cent by volume of alcohol.
(c) Tax revenue includes carbon accrual revenue measured at market price, with details of the accounting
treatment of carbon revenue set out in Note 1 to the General Government Sector Financial Statements.
319
Appendix B: Australian Government budget financial statements
Note 3(a): Taxation revenue by source
Taxes on income, profits and capital gains
Income and capital gains levied on individuals
Income and capital gains levied on enterprises
Total taxes on income, profits and capital gains
Taxes on employers' payroll and labour force
Taxes on the provision of goods and services
Sales/goods and services tax
Excises and levies
Taxes on international trade
Total taxes on the provision of
goods and services
Other sale of goods and services
Total taxation revenue
Memorandum:
Medicare levy revenue
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
153,380
82,800
236,180
165,240
95,650
260,890
180,800
99,160
279,960
194,220
101,940
296,160
497
517
538
559
50,980
27,550
6,740
54,860
28,475
7,240
57,990
27,926
8,680
60,860
29,071
8,800
85,270
90,575
94,596
98,731
1,684
323,631
9,697
361,679
10,785
385,879
11,440
406,890
8,930
9,620
10,270
10,940
Note 4: Sales of goods and services revenue
Estimates
2011-12
2012-13
$m
$m
1,322
1,538
4,115
3,946
41
42
2,572
2,769
8,050
8,295
Sales of goods
Rendering of services
Operating lease rental
Fees from regulatory services
Total sales of goods and services revenue
320
Projections
2013-14
2014-15
$m
$m
1,569
1,652
3,843
3,377
42
42
3,106
3,185
8,561
8,256
Appendix B: Australian Government budget financial statements
Note 5: Interest and dividend revenue
Estimates
2011-12
2012-13
$m
$m
Interest from other governments
State and Territory debt
Housing agreements
Total interest from other governments
Projections
2013-14
2014-15
$m
$m
15
165
180
18
160
178
23
155
178
24
150
174
Interest from other sources
Advances
Deposits
Bank deposits
Indexation of HELP receivable and other
student loans
Other
Total interest from other sources
40
103
205
43
96
201
45
99
198
48
101
198
410
4,252
5,010
460
4,440
5,239
517
4,425
5,285
584
4,154
5,085
Total interest
5,190
5,417
5,463
5,258
Dividends
Dividends from other public sector entities
Other dividends
Total dividends
397
1,255
1,652
444
1,342
1,786
429
1,501
1,931
312
1,641
1,954
Total interest and dividend revenue
6,842
7,203
7,394
7,212
Note 6: Other sources of non-taxation revenue
Estimates
2011-12
2012-13
$m
$m
50
50
1,874
1,825
122
118
3,541
3,594
5,587
5,587
Industry contributions
Royalties
Seigniorage
Other
Total other sources of non-taxation revenue
321
Projections
2013-14
2014-15
$m
$m
34
35
1,806
1,751
119
119
3,750
3,888
5,709
5,793
Appendix B: Australian Government budget financial statements
Note 7: Employee and superannuation expense
Estimates
2011-12
2012-13
$m
$m
19,374
18,707
Wages and salaries expenses
Other operating expenses
Leave and other entitlements
Separations and redundancies
Workers compensation premiums and claims
Other
Total other operating expenses
Projections
2013-14
2014-15
$m
$m
18,930
19,176
2,195
59
678
1,692
4,624
2,135
43
712
1,740
4,630
2,182
45
734
1,807
4,769
2,143
41
767
1,809
4,760
Superannuation expenses
Superannuation
Superannuation interest cost
Total superannuation expenses
4,177
7,351
11,529
3,376
7,886
11,262
3,412
8,141
11,553
3,382
8,398
11,780
Total employee and superannuation expense
35,527
34,600
35,252
35,716
Note 8: Depreciation and amortisation expense
Estimates
2011-12
2012-13
$m
$m
Depreciation
Specialist military equipment
Buildings
Other infrastructure, plant and equipment
Heritage and cultural assets
Total depreciation
Total amortisation
Total depreciation and amortisation expense
Projections
2013-14
2014-15
$m
$m
2,435
1,201
1,271
38
4,944
2,556
1,242
1,319
39
5,155
2,685
1,275
1,367
39
5,365
2,787
1,328
1,419
39
5,573
788
801
745
721
5,733
5,956
6,110
6,294
Note 9: Supply of goods and services expense
Estimates
2011-12
2012-13
$m
$m
21,141
19,901
2,575
2,566
39,626
40,274
5,298
5,375
1,784
1,975
70,425
70,092
Supply of goods and services
Operating lease rental expenses
Personal benefits - indirect
Health care payments
Other
Total supply of goods and services
322
Projections
2013-14
2014-15
$m
$m
20,606
21,027
2,654
2,705
42,958
46,058
5,499
5,604
2,528
3,460
74,244
78,855
Appendix B: Australian Government budget financial statements
Note 10: Interest expense
Estimates
2011-12
2012-13
$m
$m
Interest on debt
Government securities(a)
Loans
Other
Total interest on debt
Other financing costs
Projections
2013-14
2014-15
$m
$m
11,623
14
60
11,697
12,318
9
46
12,374
12,453
9
42
12,503
12,257
9
39
12,305
1,286
1,306
1,662
1,823
Total interest expense
12,983
13,680
14,165
14,128
(a) Public debt interest estimates are calculated using the contract interest rates incurred on existing
Commonwealth Government Securities (CGS) when issued and technical assumptions, based
on prevailing market interest rates across the yield curve, for yields on future CGS issuance.
Note 11: Current and capital grants expense
Current grants expense
State and Territory governments(a)
Local governments
Private sector
Overseas
Non-profit organisations
Multi-jurisdictional sector
Other
Total current grants expense
Capital grants expense
Mutually agreed write-downs
Other capital grants
State and Territory governments(a)
Local governments
Private sector
Multi-jurisdictional sector
Other
Total capital grants expense
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
84,569
73
2,257
4,077
1,929
9,177
9,716
111,799
88,609
32
2,051
4,712
1,659
9,594
11,201
117,859
92,730
0
2,478
5,222
1,756
9,878
11,523
123,587
98,009
0
2,235
5,481
1,624
10,138
15,129
132,616
2,267
2,403
2,549
2,696
11,112
565
273
93
402
14,712
6,090
398
0
97
464
9,451
7,111
429
0
100
477
10,666
3,035
10
0
102
628
6,471
126,511
127,311
134,253
139,087
Total grants expense
(a) Natural Disasters Relief payments to the States and Territory governments is reclassified from current to
capital grants.
323
Appendix B: Australian Government budget financial statements
Note 12: Personal benefits expense
Estimates
2011-12
2012-13
$m
$m
35,695
37,723
6,385
6,224
20,004
20,990
31,986
33,438
7,608
8,528
4,167
3,809
687
521
271
282
243
274
3,741
3,698
110,787
115,488
Social welfare - assistance to the aged
Assistance to veterans and dependants
Assistance to people with disabilities
Assistance to families with children
Assistance to the unemployed
Student assistance
Other welfare programmes
Financial and fiscal affairs
Vocational and industry training
Other
Total personal benefits expense
Projections
2013-14
2014-15
$m
$m
40,063
42,822
6,235
6,156
22,327
23,772
34,428
35,267
8,140
8,628
3,782
3,869
550
578
293
305
276
271
5,711
8,168
121,805
129,837
Note 13: Operating result and comprehensive result (total change in net worth)
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
-95,386
-122,328
-115,913
-109,157
16,442
0
0
0
Adjusted opening net worth
-78,945
-122,328
-115,913
-109,157
Net operating balance
-27,637
2,829
6,919
9,288
Opening net worth
Opening net worth adjustments(a)
Other economic flows – Included
in operating result
Foreign exchange gains
Gains from sale of assets
Other gains
Swap interest revenue
Net write-down and impairment of assets
and fair value losses
Foreign exchange losses
Losses from sale of assets
Swap interest expense
Total other economic flows
1
43
-8,012
104
26
4,882
5,592
0
871
232
5,262
0
68
111
5,193
0
-5,376
-527
15
-59
-13,812
-5,887
0
5
0
4,618
-6,284
0
5
0
87
-6,641
0
3
0
-1,265
Operating result(b)
-41,449
7,447
7,005
8,023
-1,935
-1,031
-249
371
Other economic flows –
other movements in equity(c)
-43,383
6,415
6,756
8,394
Comprehensive result
(a) Reflects a decrease in the superannuation liability mainly due to a difference in the estimated and actual
discount rate. Refer to Note 18 for further details.
(b) Operating result under AEIFRS accounting standards.
(c) Other economic flows not included in the AEIFRS accounting standards operating result.
324
Appendix B: Australian Government budget financial statements
Note 14: Advances paid and other receivables
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
Advances paid
Loans to State and Territory governments
Higher Education Loan Program
Student Financial Supplement Scheme
Other
less Provision for doubtful debts
Total advances paid
2,926
17,582
656
8,665
38
29,790
2,975
20,092
598
9,056
38
32,683
2,932
22,817
533
10,367
39
36,611
2,845
25,730
464
11,756
39
40,757
Other receivables
Goods and services receivable
Recoveries of benefit payments
Taxes receivable
Other
less Provision for doubtful debts
Total other receivables
964
2,942
19,364
17,126
3,385
37,011
996
2,937
23,202
17,089
3,504
40,720
993
2,894
25,381
16,704
3,635
42,336
1,018
2,923
27,458
17,300
3,769
44,929
Note 15: Investments, loans and placements
Estimates
2011-12
2012-13
$m
$m
28,234
31,557
4,571
9,680
65,184
65,630
97,990
106,868
Investments - deposits
IMF quota
Other
Total investments, loans and placements
325
Projections
2013-14
2014-15
$m
$m
28,403
26,822
10,575
10,666
67,604
70,960
106,582
108,448
Appendix B: Australian Government budget financial statements
Note 16: Total non-financial assets
Estimates
2011-12
2012-13
$m
$m
Projections
2013-14
2014-15
$m
$m
Land and buildings
Land
Buildings
Total land and buildings
8,661
23,094
31,755
8,595
23,953
32,548
8,531
24,352
32,883
8,588
24,255
32,843
Plant, equipment and infrastructure
Specialist military equipment
Other
Total plant, equipment and infrastructure
40,309
12,387
52,696
41,352
12,826
54,178
43,133
12,905
56,039
45,614
12,389
58,003
Inventories
Inventories held for sale
Inventories not held for sale
Total inventories
1,033
5,998
7,031
1,087
6,117
7,204
1,144
6,184
7,328
1,104
6,253
7,357
Intangibles
Computer software
Other
Total intangibles
3,151
2,074
5,224
3,087
2,300
5,388
2,899
2,426
5,326
2,821
2,761
5,582
316
316
316
316
Total investment properties
Total biological assets
Total heritage and cultural assets
Total assets held for sale
Other non-financial assets
Prepayments
Other
Total other non-financial assets
Total non-financial assets
36
36
36
36
9,498
9,511
9,523
9,536
148
148
148
148
2,440
757
3,196
2,473
549
3,022
2,499
559
3,058
2,542
624
3,166
109,901
112,350
114,656
116,987
Note 17: Loans
Estimates
2011-12
2012-13
$m
$m
3,204
6,647
4,355
4,365
798
744
8,357
11,755
Promissory notes
Special drawing rights
Other
Total loans
326
Projections
2013-14
2014-15
$m
$m
6,670
6,694
4,407
4,449
683
646
11,760
11,789
Appendix B: Australian Government budget financial statements
Note 18: Employee and superannuation liabilities
Estimates
2011-12
2012-13
$m
$m
133,487
137,995
Total superannuation liability(a)
Other employee liabilities
Leave and other entitlements
Accrued salaries and wages
Workers compensation claims
Separations and redundancies
Other
Total other employee liabilities
6,648
334
1,913
50
2,593
11,539
6,761
326
1,952
51
2,718
11,806
Projections
2013-14
2014-15
$m
$m
142,565
147,196
6,896
337
1,996
51
2,842
12,122
7,038
345
2,033
51
2,843
12,311
Total employee and
superannuation liabilities
145,026
149,802
154,687
159,506
(a) For budget reporting purposes, a discount rate applied by actuaries in preparing Long Term Cost
Reports is used to value the superannuation liability. This reduces the volatility in reported liabilities that
would occur from year to year if the long-term government bond rate were used. Consistent with
Australian Accounting Standards, the long-term government bond rate as at 30 June is used to calculate
the superannuation liability for the purpose of actuals reporting.
Note 19: Provisions and payables
Estimates
2011-12
2012-13
$m
$m
Suppliers payable
Trade creditors
Operating lease rental payable
Other creditors
Total suppliers payable
Projections
2013-14
2014-15
$m
$m
3,340
193
946
4,478
3,287
198
944
4,428
3,347
196
944
4,487
3,353
197
943
4,493
13,165
14,138
14,428
14,984
2,292
2,881
3,145
3,268
Grants provisions and payable
State and Territory governments
Non-profit organisations
Private sector
Overseas
Local governments
Other
Total grants provisions and payable
274
102
482
1,020
18
8,722
10,618
267
102
480
1,019
18
9,028
10,914
267
102
477
1,171
18
7,726
9,759
266
102
469
882
18
6,920
8,657
Other provisions and payables
Provisions for tax refunds
Other
Total other provisions and payables
2,243
10,151
12,394
2,251
9,801
12,053
2,294
10,294
12,588
2,294
11,209
13,503
Total personal benefits provisions and payable
Total subsidies provisions and payable
327
Appendix B: Australian Government budget financial statements
Note 20: Reconciliation of cash
Estimates
2011-12
2012-13
$m
$m
2,829
-27,637
Net operating balance (revenues less expenses)
less Revenues not providing cash
Other
Total revenues not providing cash
plus Expenses not requiring cash
Increase/(decrease) in employee entitlements
Depreciation/amortisation expense
Mutually agreed write-downs
Other
Total expenses not requiring cash
plus Cash provided / (used) by working
capital items
Decrease/(increase) in inventories
Decrease/(increase) in receivables
Decrease/(increase) in other financial assets
Decrease/(increase) in other non-financial assets
Increase/(decrease) in benefits, subsidies and grants
payable
Increase/(decrease) in suppliers' liabilities
Increase/(decrease) in other provisions and payables
Net cash provided / (used) by working capital
equals (Net cash from/(to) operating activities)
plus (Net cash from/(to) investing activities)
Net cash from operating activities and investment
plus (Net cash from/(to) financing activities)
equals Net increase/(decrease) in cash held
Cash at the beginning of the year
Net increase/(decrease) in cash
Cash at the end of the year
Projections
2013-14
2014-15
$m
$m
6,919
9,288
955
955
1,070
1,070
1,201
1,201
1,383
1,383
4,792
5,733
2,267
939
13,730
4,778
5,956
2,403
739
13,876
4,884
6,110
2,549
1,035
14,578
4,822
6,294
2,696
1,470
15,282
-522
-6,237
582
-381
-2,640
-415
-9,336
747
8
2,057
-403
-7,948
1,383
23
-415
-322
-8,429
441
7
-229
-108
25
-9,282
-54
-634
-7,627
73
345
-6,943
-32
584
-7,981
-24,143
-17,599
-41,742
41,749
8,008
-17,009
-9,001
9,028
13,353
-18,878
-5,525
5,687
15,205
-19,762
-4,557
4,344
7
2,477
7
2,484
27
2,484
27
2,511
162
2,511
162
2,673
-213
2,673
-213
2,460
Note 20(a): Consolidated Revenue Fund
Estimates
2011-12
2012-13
$m
$m
Total general government sector cash
less CAC Agency cash balances
plus Special public monies
Balance of Consolidated Revenue Fund
at 30 June
328
Projections
2013-14
2014-15
$m
$m
2,484
1,735
382
2,511
1,718
382
2,673
1,705
382
2,460
1,732
382
1,131
1,175
1,350
1,110
Appendix B: Australian Government budget financial statements
The estimated and projected cash balances reflected in the balance sheet for the
Australian Government GGS (Table B2) include the reported cash balances controlled
and administered by Australian Government agencies subject to the Financial
Management and Accountability Act 1997, and the reported cash balances controlled and
administered by entities subject to the Commonwealth Authorities and Companies
Act 1997 (CAC Act), that implement public policy through the provision of primarily
non-market services.
Revenues or monies raised by the Executive Government automatically form part of
the Consolidated Revenue Fund by force of section 81 of the Australian Constitution.
For practical purposes, total Australian Government GGS cash, less cash controlled
and administered by CAC Act entities, plus special public monies, represents the
Consolidated Revenue Fund referred to in section 81 of the Australian Constitution.
On this basis, the balance of the Consolidated Revenue Fund is shown above.
329
Appendix B: Australian Government budget financial statements
Attachment A
FINANCIAL REPORTING STANDARDS AND BUDGET CONCEPTS
The Charter of Budget Honesty Act 1998 (the Charter) requires the Mid-Year Economic
and Fiscal Outlook (MYEFO) to be based on external reporting standards.
The Government has produced financial statements that comply with both ABS GFS
and AAS, meeting the requirement of the Charter, with departures disclosed. The
financial statements for the Mid-Year Economic and Fiscal Outlook 2011-12 have been
prepared on a basis consistent with the 2011-12 Budget. The statements reflect the
Government’s accounting policy that ABS GFS remains the basis of budget accounting
policy, except where the Government applies AAS because it provides a better
conceptual basis for presenting information of relevance to users of public sector
financial reports.
AASB 1049 and the Accrual Uniform Presentation Framework (UPF) also provide a
basis for reporting of the public non-financial corporations (PNFC) and public financial
corporations (PFC) sectors and the total non-financial public sector (NFPS).
General Government Sector Financial Reporting (AASB 1049)
The MYEFO primarily focuses on the financial performance and position of the general
government sector (GGS). The ABS defines the GGS as providing public services
which are mainly non-market in nature, mainly for the collective consumption of the
community, involving the transfer or redistribution of income and financed mainly
through taxes and other compulsory levies. AASB 1049 recognises the GGS as a
reporting entity.
AASB 1049 history and conceptual framework
The Australian Accounting Standards Board (AASB) released AASB 1049 for
application from the 2008-09 financial year. AASB 1049 seeks to ‘harmonise’ ABS GFS
and AAS.
The reporting framework for AASB 1049 requires the preparation of accrual-based
general purpose financial reports, showing government assets, liabilities, revenue,
expenses and cash flows. GGS reporting under AASB 1049 aims to provide users with
information about the stewardship of each government in relation to its GGS and
accountability for the resources entrusted to it; information about the financial
position, performance and cash flows of each government’s GGS; and information that
facilitates assessments of the macroeconomic impact. While AASB 1049 provides a
basis for whole-of-government and GGS outcome reporting (including the PNFC and
PFC sectors), budget reporting focuses on the GGS.
330
Appendix B: Australian Government budget financial statements
There are three main general purpose statements that must be prepared in accordance
with ABS GFS and AASB 1049. These are:
• an operating statement, including other economic flows, which shows net operating
balance and net lending/borrowing (fiscal balance);
–
to allow the presentation of a single set of financial statements in accordance
with AASB 1049, the ABS GFS statement of other economic flows has been
incorporated into the operating statement,
• a balance sheet, which also shows net worth, net financial worth, net financial
liabilities and net debt; and
• a cash flow statement, which includes the calculation of the underlying cash
balance.
In addition to these general purpose statements, notes to the financial statements are
required. These notes include a summary of accounting policies, disaggregated
information and other disclosures required by AAS. A full set of notes and other
disclosures required by AAS are included in the annual consolidated financial
statements.
All financial data presented in the financial statements are recorded as either stocks
(assets and liabilities) or flows (classified as either transactions or other economic
flows). Transactions result from a mutually agreed interaction between economic
entities. Despite their compulsory nature, taxes are transactions deemed to occur by
mutual agreement between the government and the taxpayer. Transactions that
increase or decrease net worth (assets less liabilities) are reported as revenues and
expenses respectively in the operating statement.1
A change to the value or volume of an asset or liability that does not result from a
transaction is an other economic flow. This can include changes in values from market
prices, most actuarial valuations, exchange rates and changes in volumes from
discoveries, depletion and destruction. All other economic flows are reported in the
operating statement.
Consistent with the ABS GFS framework, and in general AAS, the financial statements
record flows in the period in which they occur. As a result, prior period outcomes may
be revised for classification changes relating to information that could reasonably have
been expected to be known in the past, is material in at least one of the affected periods
and can be reliably assigned to the relevant period(s).
1
Not all transactions impact on net worth. For example, transactions in financial assets and
liabilities do not impact on net worth as they represent the swapping of assets and liabilities
on the balance sheet.
331
Appendix B: Australian Government budget financial statements
Operating statement
The operating statement presents details of transactions in revenues, expenses, the net
acquisition of non-financial assets (net capital investment) and other economic flows
for an accounting period.
Revenues arise from transactions that increase net worth and expenses arise from
transactions that decrease net worth. Revenues less expenses gives the net operating
balance. The net operating balance is similar to the National Accounts concept of
government saving plus capital transfers.
The net acquisition of non-financial assets (net capital investment) measures the
change in the Australian Government’s stock of non-financial assets owing to
transactions. As such, it measures the net effect of purchases, sales and consumption
(for example, depreciation of fixed assets and use of inventory) of non-financial assets
during an accounting period.
Net acquisition of non-financial assets equals gross fixed capital formation, less
depreciation, plus changes (investment) in inventories, plus other transactions in
non-financial assets.
Other economic flows are presented in the operating statement and outline changes in
net worth that are driven by economic flows other than revenues and expenses.
Revenues, expenses and other economic flows sum to the total change in net worth
during a period. The majority of other economic flows for the Australian Government
GGS arise from price movements in its assets and liabilities.
Fiscal balance
The fiscal balance (or net lending/borrowing) is the net operating balance less net
capital investment. Thus, the fiscal balance includes the impact of net expenditure
(effectively purchases less sales) on non-financial assets rather than consumption
(depreciation) of non-financial assets.2
The fiscal balance measures the Australian Government’s investment-saving balance.
It measures in accrual terms the gap between government savings plus net capital
transfers, and investment in non-financial assets. As such, it approximates the
contribution of the Australian Government GGS to the balance on the current account
in the balance of payments.
2
The net operating balance includes consumption of non-financial assets because depreciation
is an expense. Depreciation also forms part of net capital investment, which (in the
calculation of fiscal balance) offsets the inclusion of depreciation in the net operating balance.
332
Appendix B: Australian Government budget financial statements
Balance sheet
The balance sheet shows stocks of assets, liabilities and net worth. In accordance with
the UPF, net debt, net financial worth and net financial liabilities are also reported in
the balance sheet.
Net worth
The net worth of the GGS, PNFC and PFC sectors is defined as assets less liabilities.
This differs from the ABS GFS definition for the PNFC and PFC sectors where net
worth is defined as assets less liabilities less shares and other contributed capital. Net
worth is an economic measure of wealth, reflecting the Australian Government’s
contribution to the wealth of Australia.
Net financial worth
Net financial worth measures a government’s net holdings of financial assets. It is
calculated from the balance sheet as financial assets minus liabilities. This differs from
the ABS GFS definition of net financial worth for the PNFC and PFC sectors, defined as
financial assets, less liabilities, less shares, less other contributed capital. Net financial
worth is a broader measure than net debt, in that it incorporates provisions made (such
as superannuation) as well as holdings of equity. Net financial worth includes all
classes of financial assets and all liabilities, only some of which are included in net
debt. As non-financial assets are excluded from net financial worth, this is a narrower
measure than net worth. However, it avoids the concerns inherent with the net worth
measure relating to the valuation of non-financial assets and their availability to offset
liabilities.
Net financial liabilities
Net financial liabilities comprises total liabilities less financial assets but excludes
equity investments in the other sectors of the jurisdiction. Net financial liabilities is a
more accurate indicator than net debt of a jurisdiction’s fiscal position as it includes
substantial non-debt liabilities such as accrued superannuation and long service leave
entitlements. Excluding the net worth of other sectors of government results is a purer
measure of financial worth than net financial worth as, in general, the net worth of
other sectors of government, in particular the PNFC sector, is backed up by physical
assets.
Net debt
Net debt is the sum of selected financial liabilities (deposits held, advances received,
government securities, loans, and other borrowings) less the sum of selected financial
assets3 (cash and deposits, advances paid, and investments, loans and placements).
3
Financial assets are defined as cash, an equity instrument of another entity, a contractual
right to receive cash or financial asset, and a contract that will or may be settled in the
entity’s own equity instruments.
333
Appendix B: Australian Government budget financial statements
This includes financial assets held by the Future Fund which are invested in these asset
classes, including term deposits and investments in collective investment vehicles. Net
debt does not include superannuation related liabilities. Net debt is a common
measure of the strength of a government’s financial position. High levels of net debt
impose a call on future revenue flows to service that debt.
Cash flow statement
The cash flow statement identifies how cash is generated and applied in a single
accounting period. The cash flow statement reflects a cash basis of recording (rather
than an accrual basis) where information is derived indirectly from underlying accrual
transactions and movements in balances. This, in effect, means that transactions are
captured when cash is received or when cash payments are made. Cash transactions
are specifically identified because cash management is considered an integral function
of accrual budgeting.
Underlying cash balance
The underlying cash balance plus Future Fund earnings (ABS GFS cash
surplus/deficit) is the cash counterpart of the fiscal balance, reflecting the Australian
Government’s cash investment-saving balance. This measure is conceptually
equivalent under the current accrual framework and the previous cash framework. For
the GGS, the underlying cash balance is calculated as shown below:
Net cash flows from operating activities
plus
Net cash flows from investments in non-financial assets
less
Net acquisitions of assets acquired under finance leases and similar arrangements4
equals
ABS GFS cash surplus/deficit
less
Future Fund earnings
equals
Underlying cash balance
The Government is reporting the underlying cash balance net of Future Fund earnings
from 2005-06 onwards because the earnings will be reinvested to meet future
4
The underlying cash balance treats the acquisition and disposal of non-financial assets in the
same manner regardless of whether they occur by purchase/sale or finance lease —
acquisitions reduce the underlying cash balance and disposals increase the underlying cash
balance. However, finance leases do not generate cash flows at the time of acquisition or
disposal equivalent to the value of the asset. As such, net acquisitions of assets under finance
leases are not shown in the body of the cash flow statement but are reported as a
supplementary item for the calculation of the underlying cash balance.
334
Appendix B: Australian Government budget financial statements
superannuation payments and are therefore not available for current spending.
However, Future Fund earnings are included in the fiscal balance because
superannuation expenses relating to future cash payments are recorded in the fiscal
balance estimates.
Expected Future Fund earnings are separately identified in the Australian Government
GGS cash flow statement in Table B3 of this statement and the historical tables in
Appendix D.
Headline cash balance
The headline cash balance is calculated by adding net cash flows from investments in
financial assets for policy purposes and Future Fund earnings to the underlying cash
balance.
Cash flows from investments in financial assets for policy purposes include equity
transactions and net advances.5 Equity transactions include equity injections into
controlled businesses and privatisations of government businesses. Net advances
include net loans to the States, net loans to students under the Higher Education Loan
Program, and contributions to international organisations that increase the Australian
Government’s financial assets.
Sectoral classifications
To assist in analysing the public sector, data is presented by institutional sector as
shown in Figure B1. ABS GFS defines the GGS and the PNFC and PFC sectors.
AASB 1049 has also adopted this sectoral reporting.
5
Cash flows from investments in financial assets for policy purposes were called net advances
under the cash budgeting framework.
335
Appendix B: Australian Government budget financial statements
Figure B1: Institutional structure of the public sector
Total public sector
Public financial corporations
sector
Total non-financial
public sector
(Includes Reserve Bank of Australia and
other borrowing authorities)
General government sector
(Government departments and
agencies that provide non-market
public services and are funded mainly
through taxes)
336
Public non-financial corporations
sector
(Provide goods and services to
consumers on a commercial basis, are
funded largely by the sale of these
goods and services and are generally
legally distinguishable from the
governments that own them)
Appendix B: Australian Government budget financial statements
Table B10: Entities within the sectoral classifications
General government sector entities
Agriculture, Fisheries and Forestry Portfolio
Australian Fisheries Management Authority, Australian Pesticides and Veterinary
Medicines Authority, Cotton Research and Development Corporation, Department
of Agriculture, Fisheries and Forestry, Fisheries Research and Development
Corporation, Grains Research and Development Corporation, Grape and Wine
Research and Development Corporation, Rural Industries Research and
Development Corporation, Sugar Research and Development Corporation, Wheat
Exports Australia, Wine Australia Corporation
Attorney-General’s Portfolio
Administrative Appeals Tribunal, Attorney-General’s Department, Australian
Commission for Law Enforcement Integrity, Australian Crime Commission,
Australian Customs and Border Protection Service, Australian Federal Police,
Australian Human Rights Commission, Australian Institute of Criminology,
Australian Law Reform Commission, Australian Security Intelligence Organisation,
Australian Transaction Reports and Analysis Centre (AUSTRAC), CrimTrac
Agency, Family Court of Australia, Federal Court of Australia, Federal Magistrates
Court of Australia, High Court of Australia, Insolvency and Trustee Service
Australia, National Native Title Tribunal, Office of Parliamentary Counsel, Office of
the Australian Information Commissioner, Office of the Director of Public
Prosecutions
Broadband, Communications and the Digital Economy Portfolio
Australian Broadcasting Corporation, Australian Communications and Media
Authority, Department of Broadband, Communications and the Digital Economy,
Special Broadcasting Service Corporation
Climate Change and Energy Efficiency Portfolio
Clean Energy Regulator, Climate Change Authority, Department of Climate Change
and Energy Efficiency, Low Carbon Australia Limited, Office of the Renewable
Energy Regulator
Defence Portfolio
AAF Company, Army and Air Force Canteen Service, Australian Military Forces
Relief Trust Fund, Australian Strategic Policy Institute Limited, Australian War
Memorial, Defence Housing Australia, Defence Materiel Organisation, Department
of Defence, Department of Veterans’ Affairs, RAAF Welfare Recreational Company,
Royal Australian Air Force Veterans’ Residences Trust Fund, Royal Australian Air
Force Welfare Trust Fund, Royal Australian Navy Central Canteens Board, Royal
Australian Navy Relief Trust Fund
337
Appendix B: Australian Government budget financial statements
Table B10: Entities within the sectoral classifications (continued)
General government sector entities (continued)
Education, Employment and Workplace Relations Portfolio
Australian Curriculum, Assessment and Reporting Authority, Australian Institute
for Teaching and School Leadership Limited, Australian Learning and Teaching
Council Limited, Comcare, Department of Education, Employment and Workplace
Relations, Fair Work Australia, National Vocational Education and Training
Regulator, Office of the Australian Building and Construction Commissioner, Office
of Fair Work Ombudsman, Safe Work Australia, Seafarers Safety, Rehabilitation and
Compensation Authority (Seacare Authority), Tertiary Education Quality and
Standards Agency
Family, Housing, Community Services and Indigenous Affairs Portfolio
Aboriginal Hostels Limited, Anindilyakwa Land Council, Central Land Council,
Department of Families, Housing, Community Services and Indigenous Affairs,
Equal Opportunity for Women in the Workplace Agency, Indigenous Business
Australia, Indigenous Land Corporation, Northern Land Council, Outback Stores
Pty Ltd, Tiwi Land Council, Torres Strait Regional Authority, Wreck Bay Aboriginal
Community Council
Finance and Deregulation Portfolio
Australian Electoral Commission, Commonwealth Superannuation Corporation,
ComSuper, Department of Finance and Deregulation, Future Fund Management
Agency
Foreign Affairs and Trade Portfolio
AusAID, Australian Centre for International Agricultural Research, Australian
Secret Intelligence Service, Australian Trade Commission, Department of Foreign
Affairs and Trade, Export Finance and Insurance Corporation National Interest
Account
Health and Ageing Portfolio
Aged Care Standards and Accreditation Agency Ltd, Australian Commission on
Safety and Quality in Health Care, Australian Institute of Health and Welfare,
Australian National Preventive Health Agency, Australian Organ and Tissue
Donation and Transplantation Authority, Australian Radiation Protection and
Nuclear Safety Agency, Cancer Australia, Department of Health and Ageing, Food
Standards Australia New Zealand, General Practice Education and Training
Limited, Health Workforce Australia, Interim Independent Hospital Pricing
Authority, National Blood Authority, National Health and Medical Research
Council, National Health Performance Authority, Private Health Insurance
Administration Council, Private Health Insurance Ombudsman, Professional
Services Review Scheme
338
Appendix B: Australian Government budget financial statements
Table B10: Entities within the sectoral classifications (continued)
General government sector entities (continued)
Human Services Portfolio
Department of Human Services
Immigration and Citizenship Portfolio
Department of Immigration and Citizenship, Migration Review Tribunal and
Refugee Review Tribunal
Infrastructure and Transport Portfolio
Australian Maritime Safety Authority, Australian Transport Safety Bureau, Civil
Aviation Safety Authority, Department of Infrastructure and Transport, National
Transport Commission
Innovation, Industry, Science and Research Portfolio
Australian Institute of Aboriginal and Torres Strait Islander Studies, Australian
Institute of Marine Science, Australian Nuclear Science and Technology
Organisation, Australian Research Council, Commonwealth Scientific and Industrial
Research Organisation, Department of Innovation, Industry, Science and Research,
IIF Investments Pty Limited, IP Australia
Prime Minister and Cabinet Portfolio
Australia Business Arts Foundation Ltd, Australia Council, Australian Film,
Television and Radio School, Australian Institute of Family Studies, Australian
National Audit Office, Australian National Maritime Museum, Australian Public
Service Commission, Australian Sports Anti-Doping Authority, Australian Sports
Commission, Australian Sports Foundation Limited, Bundanon Trust, Department
of the Prime Minister and Cabinet, Department of Regional Australia, Regional
Development and Local Government, National Archives of Australia, National
Australia Day Council Limited, National Capital Authority, National Film and
Sound Archive, National Gallery of Australia, National Library of Australia,
National Museum of Australia, Office of the Commonwealth Ombudsman, Office of
National Assessments, Office of the Inspector-General of Intelligence and Security,
Office of the Official Secretary to the Governor-General, Old Parliament House,
Screen Australia
Resources, Energy and Tourism Portfolio
Australian Solar Institute Limited, Department of Resources, Energy and Tourism,
Geoscience Australia, National Offshore Petroleum Safety and Environmental
Management Authority, Tourism Australia
339
Appendix B: Australian Government budget financial statements
Table B10: Entities within the sectoral classifications (continued)
General government sector entities (continued)
Sustainability, Environment, Water, Population and Communities Portfolio
Bureau of Meteorology, Department of Sustainability, Environment, Water,
Population and Communities, Director of National Parks, Great Barrier Reef Marine
Park Authority, Murray-Darling Basin Authority, National Water Commission,
Sydney Harbour Federation Trust
Treasury Portfolio
Australian Bureau of Statistics, Australian Competition and Consumer Commission,
Australian Office of Financial Management, Australian Prudential Regulation
Authority, Australian Securities and Investments Commission, Australian Taxation
Office, Commonwealth Grants Commission, Corporations and Markets Advisory
Committee, Department of the Treasury, Inspector-General of Taxation, National
Competition Council, Office of the Auditing and Assurance Standards Board, Office
of the Australian Accounting Standards Board, Productivity Commission, Royal
Australian Mint
Parliamentary Departments
Department of Parliamentary Services, Department of the House of Representatives,
Department of the Senate
Public financial corporations
Education, Employment and Workplace Relations Portfolio
Coal Mining Industry (Long Service Leave Funding) Corporation
Finance and Deregulation Portfolio
Medibank Private Ltd
Foreign Affairs and Trade Portfolio
Export Finance and Insurance Corporation
Treasury Portfolio
Australia Reinsurance Pool Corporation, Reserve Bank of Australia, OzCar
340
Appendix B: Australian Government budget financial statements
Table B10: Entities within the sectoral classifications (continued)
Public non-financial corporations
Attorney General’s Portfolio
Australian Government Solicitor
Broadband, Communications and the Digital Economy Portfolio
Australian Postal Corporation, NBN Co Ltd
Family, Housing, Community Services and Indigenous Affairs Portfolio
Voyages Indigenous Tourism Australia Pty Ltd
Finance and Deregulation Portfolio
Albury-Wodonga Development Corporation, Australian River Co. Ltd, ASC Pty Ltd
Human Services Portfolio
Australian Hearing Services
Infrastructure and Transport Portfolio
Airservices Australia, Australian Rail Track Corporation Ltd
Differences between ABS GFS and AAS framework (AASB 1049)
AASB 1049 has adopted the AAS conceptual framework and principles for the
recognition of assets, liabilities, revenues and expenses and their presentation,
measurement and disclosure. In addition, AASB 1049 has broadly adopted the
ABS GFS conceptual framework for presenting government financial statements. In
particular, AASB 1049 requires the GGS to prepare a separate set of financial
statements, over-riding AASB 127 Consolidated and Separate Financial Statements.
AASB 1049 also follows ABS GFS by requiring changes in net worth to be split into
either transactions or ‘other economic flows’ and for this to be presented in a single
operating statement. AASB 1049 is therefore broadly consistent with international
statistical standards and the International Monetary Fund’s (IMF) Government Finance
Statistics Manual 2001.6
Some of the major differences between AASB 1049 and the ABS GFS treatments of
transactions are outlined in Table B11. Further information on the differences between
6
Additional information on the Australian accrual GFS framework is available in the ABS
publication Australian System of Government Finance Statistics: Concepts, Sources and Methods,
2005 (cat. no. 5514.0).
341
Appendix B: Australian Government budget financial statements
the two systems is provided in the ABS publication Australian System of Government
Finance Statistics: Concepts, Sources and Methods, 2005 (cat. no. 5514.0).
Table B11: Major differences between AAS and ABS GFS
Issue
AAS treatment
ABS GFS treatment
Treatment
adopted
Acquisition of
defence
weapons
platforms
(DWP)
Treated as capital expenditure.
DWP appear as a non-financial
asset on the balance sheet.
Depreciation expense on assets is
recorded in the operating
statement. AASB 1049 requires
cost to be used where fair value of
the assets cannot be reliably
measured.
ABS has updated its treatment in
its GFS reports to record DWP as
a non-financial asset on a market
value basis. This represents an
early adoption of changes to the
System of National Accounts.
AAS
Circulating
coins —
seigniorage
The profit between the cost and
sale of circulating coins
(seigniorage) is treated as
revenue.
Circulating coins (seigniorage) is
treated as a liability, and the cost
of producing the coins is treated as
an expense.
AAS
Provision for
bad and
doubtful debts
Treated as part of operating
expenses and included in the
balance sheet as an offset to
assets.
Creating provisions is not
considered an economic event and
is therefore not considered to be
an expense or reflected in the
balance sheet.
AAS
Advances to
the
International
Development
Association
and Asian
Development
Fund
Recorded at fair value in the
balance sheet.
Recorded at nominal value in
balance sheet.
ABS GFS
Concessional
loans
Discounts concessional loans by a
market rate of a similar instrument.
Does not discount concessional
loans as no secondary market is
considered to exist.
AAS
Investment in
Other Public
Sector Entities
Valued at fair value in the balance
sheet as long as it can be reliably
measured, otherwise net assets is
permissible.
Unlisted entities valued based on
their net assets in the balance
sheet.
AAS
Provision for
restoration,
decommissioning and
make-good
Included in the Fiscal Balance
capital adjustment.
Excluded from the calculation of
net lending capital adjustment.
AAS
Dividends
paid by public
corporations
Treated as an equity distribution.
Equity distributions are treated as
a distribution of profits, as opposed
to an expense.
Dividends are treated as an
expense.
ABS GFS
Deferred tax
assets and
liabilities
Corporations in the PNFC and
PFC sectors record tax expenses
on a commercial basis.
Deferred tax assets and liabilities
are reversed so that Corporations
record tax expenses on a
consistent basis to the Australian
Tax Office.
ABS GFS
342
Appendix B: Australian Government budget financial statements
Issue
AAS treatment
ABS GFS treatment
Treatment
adopted
Fiscal aggregates differences
Finance
leases
Does not deduct finance leases in
the derivation of the cash
surplus/deficit.
Deducts finance leases in the
derivation of the cash
surplus/deficit.
Both are
disclosed
Net worth of
PNFC and
PFC sectors
Calculated as assets less
liabilities.
Calculated as assets less liabilities
less shares and other contributed
capital.
AAS
Treated as a financial asset.
AAS
Classification difference
Prepayments
Treated as a non-financial asset.
343
Appendix B: Australian Government budget financial statements
Attachment B
AUSTRALIAN LOAN COUNCIL ALLOCATION
Under the Loan Council arrangements, the Australian Government and each State and
Territory government nominate an annual Loan Council Allocation (LCA). A
jurisdiction’s LCA incorporates:
• the estimated non-financial public sector GFS cash surplus/deficit (made up from
the balance of the general government and public non-financial corporations
sectors and total non-financial public sector 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.
LCA nominations are considered by the Loan Council, having regard to each
jurisdiction’s fiscal position and infrastructure requirements, as well as the
macroeconomic implications of the aggregate figure.
In March 2011, the Australian Government nominated, and the Loan Council
endorsed, a LCA deficit of $14,233 million. In the 2011-12 Budget, the
Australian Government estimated a LCA deficit of $35,714 million.
As set out in Table B12, the Australian Government’s revised estimate for the 2011-12
LCA is a $46,262 million deficit.
The Loan Council Allocation mid-year update falls outside the tolerance limit set at
budget. This change primarily reflects the weaker outlook for tax receipts.
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Appendix B: Australian Government budget financial statements
Table B12: Australian Government Loan Council Allocation
2011-12 Budget
estimate
$m
19,571
4,516
24,087
117
24,204
MYEFO
estimate
$m
33,540
3,215
36,999
117
37,116
GG sector cash surplus(-)/deficit(+)
PNFC sector cash surplus(-)/deficit(+)
NFPS cash surplus(-)/deficit(+)(a)
Acquisitions under finance leases and similar arrangements
equals ABS GFS cash surplus(-)/deficit(+)
minus Net cash flows from investments
in financial assets for policy purposes(b)
-12,216
-9,677
plus
Memorandum items(c)
-705
-531
Loan Council Allocation
35,714
46,262
(a) May not directly equate to the sum of the GG sector and the PNFC sector cash surplus/deficit due to
intersectoral transfers which are netted out.
(b) Net cash flows from investments in financial assets for policy purposes are displayed with the same sign
as they are reported in cash flow statements. Such transactions involve the transfer or exchange of a
financial asset and are not included within the 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.
(c) For the Commonwealth’s Loan Council Allocation outcome, memorandum items include the change in
net present value (NPV) of operating leases (with NPV greater than $5 million) and the over-funding of
superannuation.
345