Agenda item 2
Government Finance Statistics
in SNA 2008
Geneva 26 April 2010
Kurt Wass
EFTA Statistical Office, Luxembourg
Outline
1. Why dedicate a chapter to the General
Government?
2. The General Government sector
3. Financial presentation of the General
Government
4. Some accounting issues
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•
•
•
•
•
•
Why dedicate a chapter to
the General Government?
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Policy Sector – directly instrumental for economic policy
Different powers, motivation and functions
Affects behaviour of other economic units
The Public Sector
Revision of SNA recognized the need to provide a
presentation of government more suitable for finance
analysts and policymakers
2. The General Government sector
Entities
Controlled by Public or Private Sector?
Private
Sector
Public
Sector
Institutional Unit?
No
Yes
Controlling
Unit
Market
Producer?
Yes
Public
corporation
No
General
Government
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2. The General Government sector
• What is a market producer?
– Economically significant prices
• To what extent sales cover production costs
• No clear quantitative threshold
• “Market situation”
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2. The General Government sector
• The subsectors of the General Government
Sector:
– Central government (IMF: Budgetary and
Extrabudgetary)
– State government
– Local government
– Social Security (can be assigned to the other
three subsectors)
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2. The General Government sector
• Borderline/difficult cases
–
–
–
–
–
Quasi-corporations
Restructuring agencies
Special purpose entities
Joint Ventures
Supranational authorities
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3. Financial presentation of the General
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Government
Fundamental equations:
(1) Transactions:
Revenue
Expense
= Net operating Balance (impact on net wealth)
Net acquisitions of non-financial assets
= Net lending/net borrowing
Outlays: Expense + Net acquisitions of non-financial assets
3. Financial presentation of the General
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Government
Fundamental equations:
(2) Change in net wealth:
Net wealth (t)
+ Transactions affecting net wealth (t+1)
+ Other economic flows (t+1)
= Net wealth (t+1)
-
Financial presentation: combine (1) and (2) to
establish an integrated (and consolidated) financial
presentation
Transactions
Revenue
Opening
balance
Net Worth
Other economic flows
Expense
Closing
balance
=
Net operating
balance
=
Non
Financial
Assets
Financial presentation of the General
Government
Net acq
NFA
Holding gains/
losses
Other changes
in volume
=
=
NFA
NFA
=
Net Worth
=
NFA
=
Δ Net
Δ Net
f.worth
volume ch.
Net financial
worth
=
=
=
FA
FA
FA
FA
L
L
L
L
Net financial
worth
Net lending/
borrowing
=
=
Financial
Assets
Liabilities
f.worth
hold.g/l
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Some accounting issues
• Taxes – clarification of recording
• Interactions with non-resident governmenttype authorities
• Debt issues
• Interactions with the corporations sectors
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Summary
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• The new chapter 22 in SNA 2008:
– clarifies sectorisation issues
– brings a new integrated and consolidated financial
presentation framework of the general government (and
the public sector)
– clarifies some specific accounting issues
• The philosophy of national accounts remains:
– the aim is to reflect economic realities rather than legal or
administrative arrangements.