The 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 Charter of Budget Honesty Act 1998 (the Charter) requires that the PEFO be based on external reporting standards and that departures from applicable external reporting standards be identified.
The external standards used for 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’s (IMF) accrual GFS framework; and
- the Australian Accounting Standards (AAS) issued by the Australian Accounting Standards Board (AASB), which includes International Financial Reporting Standards (IFRS) as adopted in Australia and the public sector specific standard AASB 1049 Whole of Government and General Government Sector Financial Reporting.
The financial statements have been prepared on the same basis as the budget papers. The statements reflect the Government’s accounting policy that ABS GFS remains the basis of budget accounting policy, except where the Government applies the AAS because it provides a better conceptual basis for presenting information of relevance to users of public sector financial reports.
Fiscal reporting focuses on the 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.
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 these ABS GFS aggregates, the Uniform Presentation Framework (UPF) requires disclosure of net debt, net financial worth and net financial liabilities.
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 to be attributed to functions. In accordance with ABS GFS, disaggregated information for expenses and net acquisition of non-financial assets by function was disclosed in the 2016-17 Budget.
Departures from external reporting standards
The Charter requires that departures from applicable external reporting standards be identified. The major differences between AAS and the ABS GFS treatments of transactions are outlined in the below table.
AASB 1049 requires AAS measurement of items to be disclosed on the face of the financial statements with reconciliation to ABS GFS measurement of key fiscal aggregates, where different, in notes to the financial statements. Differences from the AAS measurement of items outlined above and reconciliation have not been included as they would effectively create different measures of the same aggregate.
Further information on the differences between the two systems is provided in the ABS publication Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2005 (cat. no. 5514.0).
|Sales of goods and services||7,697||9,249||12,011||15,558||16,763|
|Gross operating expenses|
|Wages and salaries(a)||19,767||20,074||19,866||20,017||20,418|
|Depreciation and amortisation||7,165||7,522||7,660||8,061||8,640|
|Supply of goods and services||81,411||86,745||87,558||97,400||101,857|
|Other operating expenses(a)||5,483||5,452||5,418||5,445||5,504|
|Total gross operating expenses||120,878||124,410||125,195||135,707||141,248|
|Superannuation interest expense||9,167||9,959||10,330||10,706||11,085|
|Total current transfers||274,572||284,952||297,424||314,250||331,179|
|Mutually agreed write-downs||1,722||1,845||1,959||2,102||2,246|
|Other capital grants||8,354||10,663||10,138||6,017||5,022|
|Total capital transfers||10,076||12,508||12,098||8,119||7,268|
|Net operating balance||-35,140||-33,693||-15,287||-4,951||3,464|
|Other economic flows - included in operating result|
|Net write-downs of assets|
|(including bad and doubtful debts)||-7,106||-8,077||-8,602||-8,977||-9,350|
|Assets recognised for the first time||296||348||317||330||343|
|Liabilities recognised for the first time||0||0||0||0||0|
|Net foreign exchange gains||-9||8||119||150||33|
|Net swap interest received||-437||0||0||0||0|
|Market valuation of debt||-4,673||3,156||2,547||2,350||1,960|
|Total other economic flows -|
|included in operating result||-11,215||140||1,586||157||-715|
|Non-owner movements in equity|
|Revaluation of equity investments||-3,026||-2,880||31||49||0|
|Other economic revaluations||371||53
|Total other economic flows - included in equity||-1,623||-2,350||21||16||518|
|Comprehensive result - Total change in net worth||-47,978||-35,903||-13,679||-4,777||3,267|
|Net operating balance||-35,140||-33,693||-15,287||-4,951||3,464|
|Net acquisition of non-financial assets|
|Purchases of non-financial assets||11,559||11,417||12,994||13,255||14,046|
|less Sales of non-financial assets||404||932||2,030||562||233|
|plus Change in inventories||310||449||239||260||346|
|plus Other movements in non-financial assets||56||26||-154||-7||-2|
|Total net acquisition of non-financial assets||4,355||3,438||3,389||4,885||5,517|
|Fiscal balance (Net lending/borrowing)(c)||-39,495||-37,130||-18,675||-9,836||-2,053|
(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) Operating result under AAS.
(c) The term fiscal balance is not used by the ABS.
|Cash and deposits||3,409||4,688||3,153||2,806||2,340|
|Investments, loans and placements||153,233||173,479||188,611||189,073||192,823|
|Investment in other public sector entities||44,798||50,927||51,141||51,522||51,870|
|Equity accounted investments||344||354||364||374||384|
|Investments - shares||39,394||42,558||45,746||49,253||53,116|
|Total financial assets||342,447||383,285||413,860||432,141||453,288|
|Plant, equipment and infrastructure||59,692||62,239||66,468||70,661||74,835|
|Heritage and cultural assets||11,697||11,658||11,620||11,582||11,543|
|Assets held for sale||174||147||80||80||80|
|Other non-financial assets||262||288||134||127||125|
|Total non-financial assets||122,866||126,239||130,585||134,932||139,663|
|Interest bearing liabilities|
|Total interest bearing liabilities||495,211||566,952||611,745||632,163||645,933|
|Provisions and payables|
|Other employee liabilities||17,004||17,332||17,671||18,046||18,445|
|Personal benefits provisions and payables||14,446||13,542||12,294||11,883||12,086|
|Subsidies provisions and payables||4,908||5,216||5,489||5,816||6,211|
|Grants provisions and payables||10,466||10,876||10,246||10,386||11,714|
|Other provisions and payables||13,195||14,849||13,461||13,531||13,689|
|Total provisions and payables||235,195||243,568||247,375||254,362||263,204|
|Net financial worth(b)||-387,959||-427,235||-445,260||-454,384||-455,848|
|Net financial liabilities(c)||432,757||478,162||496,402||505,906||507,718|
(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.
|Cash receipts from operating activities|
|Receipts from sales of goods and services||7,686||9,176||11,954||15,499||16,709|
|Dividends and income tax equivalents||5,332||5,833||3,462||3,886||4,304|
|Total operating receipts||387,585||408,919||436,788||469,358||500,509|
|Cash payments for operating activities|
|Payments for employees||-27,893||-28,261||-28,533||-29,130||-29,939|
|Payments for goods and services||-80,834||-87,036||-87,498||-97,188||-101,994|
|Grants and subsidies paid||-149,656||-161,852||-171,128||-180,042||-186,183|
|Personal benefit payments||-134,887||-135,637||-138,318||-139,049||-147,135|
|Total operating payments||-413,400||-433,830||-447,352||-468,522||-488,831|
|Net cash flows from operating activities||-25,815||-24,911||-10,564||836||11,678|
|Cash flows from investments in non-financial assets|
|Sales of non-financial assets||339||2,365||597||562||233|
|Purchases of non-financial assets||-11,559||-11,216||-12,582||-12,958||-13,719|
|Net cash flows from investments in non-financial assets||-11,221||-8,852||-11,985||-12,396||-13,487|
|Net cash flows from investments in financial assets for policy purposes||-14,553||-19,759||-11,799||-12,443||-12,562|
|Cash flows from investments in financial assets for liquidity purposes|
|Increase in investments||-9,396||-19,579||-13,223||1,719||-1,162|
|Net cash flows from investments in financial assets for liquidity purposes||-9,396||-19,579||-13,223||1,719||-1,162|
|Cash receipts from financing activities|
|Total cash receipts from financing activities||63,759||77,606||49,696||25,470||17,927|
|Cash payments for financing activities|
|Total cash payments for financing activities||-2,522||-3,227||-3,661||-3,533||-2,862|
|Net cash flows from financing activities||61,238||74,379||46,035||21,937||15,065|
|Net increase/(decrease) in cash held||253||1,279||-1,535||-346||-466|
|Net cash flows from operating activities and investments in non-financial assets (Surplus(+)/deficit(-))||-37,036||-33,762||-22,549||-11,560||-1,808|
|Finance leases and similar arrangements(b)||-2||0||0||0||0|
|GFS cash surplus(+)/deficit(-)||-37,037||-33,762||-22,549||-11,560||-1,808|
|less Net Future Fund earnings||3,012||3,321||3,574||3,843||4,140|
|Equals underlying cash balance(c)||-40,049||-37,083||-26,123||-15,403||-5,949|
|plus Net cash flows from investments in financial assets for policy purposes||-14,553||-19,759||-11,799||-12,443||-12,562|
|plus Net Future Fund earnings||3,012||3,321||3,574||3,843||4,140|
|Equals headline cash balance||-51,590||-53,521||-34,348||-24,002||-14,370|
(a) A positive number denotes a cash inflow; a negative number 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.