Media Release

02/2008
1 February 2008

Australian Government Monthly Financial Statements
July 2007, August 2007 and September 2007

KEY POINTS

The underlying cash balance for the 2007-08 year to 30 September 2007 was a deficit of $3,272 million.
The fiscal balance for the 2007-08 year to 30 September 2007 was a deficit of $1,366 million.

AGGREGATES	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 September $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Revenue	32,555	51,842	13,605	65,447	295,415
Expenses	23,842	46,102	20,418	66,520	277,860
Net operating balance	8,712	5,740	-6,813	-1,073	17,554
Net capital investment	11	12	282	293	1,592
Fiscal balance	8,702	5,728	-7,095	-1,366	15,962
Underlying cash balance	7,578	3,674	-6,946	-3,272	14,834
Headline cash balance	7,879	4,339	-6,223	-1,884	22,766
Total assets	220,908	217,817	-4,571	213,245	235,584
Total liabilities	201,679	202,507	1,880	204,388	208,739
Net worth	19,229	15,309	-6,451	8,858	26,845
Net debt	-36,381	-30,247	7,560	-22,687	-16,094

* As published in the 2007-2008 MYEFO

The Australian Government monthly financial statements for 2007-08 have been re-designed to provide Government Finance Statistics (GFS) information only, whilst past statements included an AAS based set of statements all analysis and commentary was on a GFS basis.

As a result of a change in accounting policy by the Australian Government which was included in the Consolidated Financial Statements 2006-07 published on 20 December 2007, these statements now include GST as an Australian Government tax with associated payments to the States and Territories treated as a grant expense.

Care needs to be taken when comparing monthly or cumulative data across years and to full year estimates. Revenues and expenses do vary from month-to-month. The accrual framework, including the timing of payments and policy decisions, can have a large impact on fiscal aggregates from one year to the next and on year-to-date outcomes.

FISCAL OUTCOMES

Underlying Cash Balance

The main components of the underlying cash balance are cash from operations and cash movements in the net investment in non-financial assets.

The underlying cash balance for the year to 30 September 2007 was a deficit of $3,272 million. This underlying cash balance is $6,981 million lower than the 2007-08 MYEFO pro rata. The difference reflects a number of individual variations including the following:

Movements in underlying cash receipts:

Lower receipts from:

Taxation due to collections typically commencing from the second quarter of the year.

Movements in underlying cash payments:

Lower payments for:

Personal benefit payments due to a decline in the number of recipients mainly influenced by seasonality factors; and
Education grants due to the timing of school and educational training payments.

Fiscal Balance

The fiscal balance for the year to 30 September 2007 was a deficit of $1,366 million. This fiscal balance is $5,357 million lower than the 2007-08 MYEFO pro rata.

FINANCIAL OUTCOMES

GFS Expenses are $2,945 million lower when compared with a pro rata of the 2007-08 MYEFO estimate whilst GFS Revenue is $8,406 million lower when compared with a pro rata of the 2007-08 MYEFO estimate.

The main reason for the lower expenses is due to the timing of grant and personal benefit payments whilst lower revenue is due to the seasonality of revenue collections.

Assets and Liabilities

The net worth balance within the General Government sector is a positive net asset position of
$8,858 million at 30 September 2007.

Lindsay Tanner MP Minister for Finance and Deregulation 1 February 2008	I J Watt Secretary to the Department of Finance and Deregulation 1 February 2008
Contact: Lindsay Tanner MP’s Office: George Wright - 0419 556 616 Department of Finance and Deregulation: Tim Youngberry (02) 6215 2660 First Assistant Secretary Financial Reporting and Cash Management

Australian Government General Government Sector – INCOME STATEMENT

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 September $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
GFS revenue
Taxation revenue	31,451	47,953	12,382	60,334	279,401
Current grants and subsidies	0	0	0	0	0
Sales of goods and services	451	894	458	1,352	5,191
Interest income	390	811	379	1,189	4,663
Dividend income	2	1,545	51	1,597	2,707
Other	261	639	336	975	3,451
Total GFS revenue	32,555	51,842	13,605	65,447	295,415
GFS expenses
Gross operating expenses
Depreciation	212	415	203	618	2,483
Superannuation	225	466	213	679	2,675
Salaries and wages	1,172	2,321	1,384	3,706	15,093
Payment for supply of goods and services	4,047	8,529	4,242	12,772	58,056
Other operating expenses	300	625	297	922	3,314
Total gross operating expenses	5,956	12,356	6,339	18,696	81,620
Nominal superannuation interest expense	507	1,006	498	1,504	6,276
Other interest expenses	343	700	344	1,044	3,992
Other property expenses	0	0	0	0	0
Current transfers
Grant expenses	9,222	16,243	4,972	21,215	87,139
Subsidy expenses	563	1,131	593	1,723	7,314
Personal benefit payments in cash	6,906	13,937	7,277	21,214	84,487
Other current transfers	0	0	0	0	0
Total current transfers	16,691	31,310	12,842	44,152	178,940
Capital transfers	345	729	395	1,124	7,031
Total GFS expenses	23,842	46,102	20,418	66,520	277,860
Net operating balance	8,712	5,740	-6,813	-1,073	17,554
Net acquisition of non-financial assets
Purchases of non-financial assets	199	352	462	813	3,715
less Sales of non-financial assets	5	14	21	35	256
less Depreciation	212	415	203	618	2,483
plus Change in inventories	12	54	27	80	238
plus Other movements in non-financial assets	17	35	16	51	378
Total net acquisition of non-financial assets	11	12	282	293	1,592
Net lending/fiscal balance	8,702	5,728	-7,095	-1,366	15,962

Australian Government General Government Sector – BALANCE SHEET

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 30-Jun-08 $m
GFS assets
Financial assets
Cash and deposits	1,250	1,161	694	1,043
Advances paid	22,200	21,950	21,875	25,013
Investments, loans and placements	76,341	71,418	65,127	57,039
Other non-equity assets	37,596	37,806	38,078	30,625
Equity	35,605	37,550	39,318	72,191
Total financial assets	172,992	169,885	165,092	185,911
Non-financial assets
Land	6,837	6,837	6,836	6,940
Buildings	16,596	16,567	16,708	16,981
Plant, equipment and infrastructure	10,269	10,248	10,292	10,931
Inventories	3,270	3,293	3,305	3,486
Heritage and cultural assets	8,210	8,214	8,215	8,245
Other non-financial assets	2,734	2,773	2,797	3,090
Total non-financial assets	47,916	47,931	48,153	49,673
Total GFS assets	220,908	217,817	213,245	235,584
GFS liabilities
Deposits held	240	258	227	263
Advances received	0	0	0	0
Government securities	57,137	58,016	58,782	59,288
Loans	5,633	5,620	5,614	7,085
Other borrowings	400	389	385	365
Superannuation liability	103,210	103,255	103,794	106,879
Other employee entitlements and provisions	8,325	8,394	8,455	8,479
Other non-equity liabilities	26,735	26,577	27,130	26,381
Total GFS liabilities	201,679	202,507	204,388	208,739
Net worth	19,229	15,309	8,858	26,845
Net financial worth	-28,687	-32,622	-39,296	-22,828
Net debt	-36,381	-30,247	-22,687	-16,094

Australian Government General Government Sector – CASH FLOW STATEMENT

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 September $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Cash receipts from operating activities
Taxes received	31,614	47,832	11,452	59,284	274,115
Receipts from sales of goods and services	455	960	293	1,253	5,188
Grants and subsidies received	0	0	0	0	0
Interest receipts	471	866	313	1,179	4,482
Dividends	3	1,222	360	1,582	2,692
GST input credits received by general government	0	0	0	0	0
Other receipts	73	456	426	882	3,150
Total operating receipts	32,616	51,336	12,844	64,180	289,628
Cash payments for operating activities
Payments for goods and services	-4,138	-7,720	-4,530	-12,250	-57,977
Grants and subsidies paid	-10,280	-18,165	-5,892	-24,057	-98,849
Interest paid	-390	-702	-229	-931	-3,646
Personal benefit payments	-7,559	-14,961	-6,609	-21,569	-83,983
Salaries, wages and other entitlements	-1,524	-3,221	-1,533	-4,754	-20,044
GST payments by general government to taxation authority	0	0	0	0	0
Other payments for operating activities	-648	-1,257	244	-1,013	-3,272
Total operating payments	-24,539	-46,026	-18,548	-64,575	-267,771
Net cash flows from operating activities	8,078	5,310	-5,705	-394	21,857
Cash flows from investments in non-financial assets
Sales of non-financial assets	7	15	21	37	301
Purchases of non-financial assets	-300	-1,195	-602	-1,797	-3,938
Net cash flows from investments in non-financial assets	-293	-1,180	-581	-1,761	-3,637
Net cash flows from investments in financial assets for policy purposes	94	210	73	283	4,550
Cash flows from investments in financial assets for liquidity purposes
Increase in investments	-8,000	-5,054	4,480	-574	-24,884
Net cash flows from investments in financial assets for liquidity purposes	-8,000	-5,054	4,480	-574	-24,884
Cash flows from financing activities
Advances received (net)	0	0	0	0	0
Borrowing (net)	284	897	1,241	2,137	2,542
Deposits received (net)	-21	-3	-31	-34	0
Other financing (net)	-45	-173	55	-118	-540
Net cash flows from financing activities	218	721	1,265	1,986	2,002
Net increase/decrease in cash held	97	8	-467	-460	-112
Net cash from operating activities and investments in non-financial assets	7,784	4,130	-6,285	-2,155	18,220
Finance leases and similar arrangements	0	-1	-11	-12	-4
GFS cash surplus(+)/deficit(-)	7,784	4,129	-6,296	-2,167	18,216
less Future Fund earnings	207	455	650	1,105	3,382
Equals underlying cash balance	7,578	3,674	-6,946	-3,272	14,834
plus net cash flows from investments in financial assets for policy purposes	94	210	73	283	4,550
plus Future Fund earnings	207	455	650	1,105	3,382
Equals headline cash balance	7,879	4,339	-6,223	-1,884	22,766

Australian Government General Government Sector –STATEMENT OF OTHER ECONOMIC FLOWS

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 YTD September $m	MYFEO ESTIMATE 2007-2008 FULL YEAR* $m
Opening net worth	2,689	2,689	2,689	2,689
Opening net worth adjustments(a)	8,291	8,291	8,291	8,291
Adjusted opening net worth	10,980	10,980	10,980	10,980
Change in net worth from operating transactions	8,712	5,740	-1,073	17,554
Change in net worth from other economic flows
Revaluation of equity(b)	-183	-234	-479	608
Net writedowns of assets (including bad and doubtful debts)	-322	-784	-1,345	-2,229
Assets recognised for the first time	-7	-106	-53	7
Liabilities recognised for the first time	0	0	0	0
Actuarial revaluations	0	0	0	0
Net foreign exchange gains	-5	-56	164	0
Net swap interest received	-4	-9	-16	-113
Market valuation of debt	-324	-604	-133	-381
Other economic revaluations(c)	382	381	813	419
Total other economic flows	-464	-1,411	-1,050	-1,689
Closing net worth	19,229	15,309	8,858	26,845

(a) Change in net worth arising from a change in 05-06 outcomes
(b) Revaluations of equity reflects changes in the market valuation of commercial entities. This line also reflects any equity revaluations at the point of disposal or sale.
(c) Largely reflects revaluation of assets and liabilities.

Australian Government General Government Sector – INCOME STATEMENT BY FUNCTION

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 September $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 2007-2008 FULL YEAR $m
GFS Expenses by Purpose
General Public Services	1,441	3,103	1,485	4,588	15,973
Defence	1,087	2,384	1,139	3,523	19,243
Public Order and Safety	331	607	328	935	3,772
Education	2,417	3,691	1,016	4,707	17,386
Health	3,660	7,297	3,386	10,683	43,357
Social Security and Welfare	7,742	15,603	8,298	23,901	95,132
Housing and Community Amenities	167	369	186	555	3,345
Recreation and Culture	230	416	265	681	2,861
Fuel and Energy	387	756	419	1,175	5,310
Agriculture, Forestry and Fishing	272	518	238	756	3,685
Mining and Mineral Resources (other than fuels); Manufacturing and Construction	188	275	126	401	2,046
Transport and Communication	216	491	325	817	4,484
Other Economic Affairs	550	1,095	528	1,623	6,122
Other Purposes
Public Debt Interest	280	567	294	860	3,517
Nominal Superannuation Interest	170	340	170	509	6,276
General Purpose Inter-Government Transactions	4,668	8,508	2,169	10,677	44,965
Natural Disaster Relief	35	79	39	118	103
Contingency Reserve (a)	4	3	9	12	282
Total GFS Expenses	23,842	46,102	20,418	66,520	277,860

(a) Asset sale related expenses are now treated as a component of the contingency reserve

NOTES:

The framework used a basis for these statements are generally consistent with the requirements of GFS. The Financial Management and Accountability Act 1997 requires monthly financial statements to be consistent with the Budget estimates, accordingly, and pursuant to the Charter of Budget Honesty Act 1998, this presentation covers the General Government sector on a GFS basis, and therefore does not include full note disclosures.

With the introduction of Business Activity Statements and Instalment Activity Statements in 2000-2001, taxpayers provide information on payments associated with several types of tax when lodging the statement and paying the aggregate net tax amount. Thus, while total tax collections are known with certainty at the end of each month, the distribution across the relevant heads of revenue cannot be finalised until all statements are received and processed. The outcomes for some revenue items provided in this statement are thus estimates, in accordance with the best judgement of the Taxation Commissioner, and subject to revision. The taxation revenue items not affected are: Petroleum Resource Rent Tax, Excise duty, Customs duty, Other Taxes and Individuals Refunds.

The sum of the revenue accrued in the month and the revisions to prior periods equals the revenue reported in the Statement of Revenue and Expenses.

All taxation items in these notes are reported on a GFS basis, unless otherwise indicated.

Note 1: Income Tax

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 September $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
INDIVIDUALS AND OTHER WITHHOLDING TAX
Gross income tax withholding	9,262	19,652	8,772	28,423	113,330
Gross other individuals	2,910	4,750	773	5,523	28,110
Less refunds	2,850	6,839	2,511	9,350	19,790
Total individuals and other withholding tax	9,322	17,563	7,033	24,596	121,650
OTHER SOURCES
Companies	11,457	12,645	728	13,374	65,250
Superannuation funds (a)	2,019	2,949	- 22	2,927	10,130
Petroleum Resource Rent Tax	5	472	20	492	2,060
Fringe Benefits tax (b)	643	787	- 35	752	3,970
Total income tax from other sources	14,123	16,853	691	17,544	81,410
Total income tax	23,445	34,416	7,725	42,140	203,060

* As published in the 2007-2008 MYEFO
(a) Includes superannuation contributions surcharge.
(b) Negative collections indicate refunds exceed collections.

Note 2: Indirect Tax

	ACTUAL 2007-2008 YTD July $m	ACTUAL 2007-2008 YTD August $m	ACTUAL 2007-2008 September $m	ACTUAL 2007-2008 YTD September $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Excise duty	2,315	3,831	1,795	5,626	23,090
Customs duty	516	992	436	1,427	6,010
Other indirect tax (including GST)	5,175	8,715	2,426	11,140	47,241
Total indirect tax revenue	8,005	13,537	4,657	18,194	76,341