Media Release

10/2008
4 April 2008

Australian Government Monthly Financial Statements
January 2008

KEY POINTS

The underlying cash balance for the 2007-08 year to 31 January 2008 was a surplus of $3,367 million.
The fiscal balance for the 2007-08 year to 31 January 2008 was a surplus of $10,581 million.

AGGREGATES	ACTUAL 2007-2008 YTD December $m	ACTUAL 2007-2008 January $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Revenue	143261	27267	170528	295415
Expenses	138041	21197	159238	277860
Net operating balance	5220	6070	11290	17554
Net capital investment	611	98	709	1592
Fiscal balance	4609	5972	10581	15962
Underlying cash balance	-300	3667	3367	14834
Headline cash balance	2009	3640	5649	22766
Total assets	217573	4376	221949	235584
Total liabilities	202131	613	202744	208739
Net worth	15442	3763	19205	26845
Net debt	-23214	-3276	-26489	-16094

* 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 31 January 2008 was a surplus of $3,367 million. This underlying cash balance is $5.3 billion 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 compared to pro rata MYEFO estimates from:

Taxation due to collections typically being higher in the second half of the financial year.

Movements in underlying cash payments:

Higher payments compared to pro rata MYEFO estimates for:

Personal benefit payments mainly influenced by seasonality factors; and
Education grants due to the timing of higher education payments.

Fiscal Balance

The fiscal balance for the year to 31 January 2008 was a surplus of $10,581 million. This fiscal balance is $1,270 million higher than the 2007-08 MYEFO pro rata estimate.

FINANCIAL OUTCOMES

Revenues and Expenses

GFS Expenses are $2,847 million lower when compared with a pro rata of the 2007-08 MYEFO estimate whilst GFS Revenue is $1,797 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 payments to suppliers 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 $19,205 million at 31 January 2008.

Lindsay Tanner MP Minister for Finance and Deregulation 4 April 2008	I J Watt Secretary to the Department of Finance and Deregulation 4 April 2008
Contact: Lindsay Tanner MP’s Office: Nardia Dazkiw - (02) 6277 7400 Department of Finance and Deregulation: Emma McDonald - (02) 6215 2383

Australian Government General Government Sector – INCOME STATEMENT

	ACTUAL 2007-2008 YTD December $m	ACTUAL 2007-2008 January $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
GFS revenue
Taxation revenue	134,204	26,071	160,275	279,401
Sales of goods and services	2,694	440	3,134	5,191
Interest income	2,357	397	2,754	4,663
Dividend income	1,869	15	1,884	2,707
Other	2,137	345	2,482	3,451
Total GFS revenue	143,261	27,267	170,528	295,415
GFS expenses
Gross operating expenses
Depreciation	1,264	208	1,472	2,483
Superannuation	1,289	231	1,519	2,675
Salaries and wages	7,508	1,029	8,537	15,093
Payment for supply of goods and services	26,906	3,913	30,820	58,056
Other operating expenses	1,749	448	2,197	3,314
Total gross operating expenses	38,716	5,829	44,544	81,620
Nominal superannuation interest expense	3,003	500	3,503	6,276
Other interest expenses	2,024	352	2,375	3,992
Current transfers
Grant expenses	44,609	6,827	51,436	87,139
Subsidy expenses	3,745	573	4,318	7,314
Personal benefit payments in cash	42,592	6,531	49,123	84,487
Total current transfers	90,947	13,931	104,877	178,940
Capital transfers	3,352	586	3,938	7,031
Total GFS expenses	138,041	21,197	159,238	277,860
Net operating balance	5,220	6,070	11,290	17,554
Net acquisition of non-financial assets
Purchases of non-financial assets	1,616	262	1,878	3,715
less Sales of non-financial assets	84	22	106	256
less Depreciation	1,264	208	1,472	2,483
plus Change in inventories	246	49	295	238
plus Other movements in non-financial assets	97	16	113	378
Total net acquisition of non-financial assets	611	98	709	1,592
Net lending/fiscal balance	4,609	5,972	10,581	15,962

Australian Government General Government Sector – BALANCE SHEET

	ACTUAL 2007-2008 YTD December $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 30-Jun-08 $m
GFS assets
Financial assets
Cash and deposits	799	612	1,043
Advances paid	22,046	22,034	25,013
Investments, loans and placements	63,466	68,090	57,039
Other non-equity assets	39,785	41,246	30,625
Equity	43,046	41,418	72,191
Total financial assets	169,142	173,400	185,911
Non-financial assets
Land	6,865	6,897	6,940
Buildings	16,881	16,875	16,981
Plant, equipment and infrastructure	10,238	10,227	10,931
Inventories	3,341	3,398	3,486
Heritage and cultural assets	8,221	8,221	8,245
Other non-financial assets	2,884	2,930	3,090
Total non-financial assets	48,431	48,548	49,673
Total GFS assets	217,573	221,949	235,584
GFS liabilities
Deposits held	307	318	263
Government securities	56,887	58,035	59,288
Loans	5,531	5,521	7,085
Other borrowings	373	372	365
Superannuation liability	104,754	104,919	106,879
Other employee entitlements and provisions	8,208	8,260	8,479
Other non-equity liabilities	26,072	25,318	26,381
Total GFS liabilities	202,131	202,744	208,739
Net worth	15,442	19,205	26,845
Net financial worth	-32,989	-29,343	-22,828
Net debt	-23,214	-26,489	-16,094

Australian Government General Government Sector – CASH FLOW STATEMENT

	ACTUAL 2007-2008 YTD December $m	ACTUAL 2007-2008 January $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Cash receipts from operating activities
Taxes received	130,051	24,290	154,341	274,115
Receipts from sales of goods and services	2,660	501	3,162	5,188
Interest receipts	1,862	146	2,008	4,482
Dividends	1,850	20	1,870	2,692
Other receipts	1,888	370	2,257	3,150
Total operating receipts	138,311	25,327	163,638	289,628
Cash payments for operating activities
Payments for goods and services	-27,946	-3,778	-31,724	-57,977
Grants and subsidies paid	-50,411	-8,858	-59,269	-98,849
Interest paid	-1,647	-375	-2,021	-3,646
Personal benefit payments	-44,234	-6,364	-50,598	-83,983
Salaries, wages and other entitlements	-9,874	-1,462	-11,336	-20,044
Other payments for operating activities	-1,770	-536	-2,307	-3,272
Total operating payments	-135,882	-21,373	-157,255	-267,771
Net cash flows from operating activities	2,429	3,954	6,383	21,857
Cash flows from investments in non-financial assets
Sales of non-financial assets	88	22	110	301
Purchases of non-financial assets	-922	-278	-1,200	-3,938
Net cash flows from investments in non-financial assets	-834	-256	-1,090	-3,637
Net cash flows from investments in financial assets for policy purposes	439	-51	388	4,550
Cash flows from investments in financial assets for liquidity purposes
Increase in investments	-2,787	-4,516	-7,303	-24,884
Net cash flows from investments in financial assets for liquidity purposes	-2,787	-4,516	-7,303	-24,884
Cash flows from financing activities
Borrowing (net)	381	783	1,164	2,542
Deposits received (net)	47	10	57	0
Other financing (net)	-29	-112	-141	-540
Net cash flows from financing activities	399	682	1,080	2,002
Net increase/decrease in cash held	-355	-187	-542	-112
Net cash from operating activities and investments in non-financial assets	1,595	3,698	5,293	18,220
Finance leases and similar arrangements	-25	-7	-32	-4
GFS cash surplus(+)/deficit(-)	1,570	3,691	5,261	18,216
less Future Fund earnings	1,870	24	1,894	3,382
Equals underlying cash balance	-300	3,667	3,367	14,834
plus net cash flows from investments in financial assets for policy purposes	439	-51	388	4,550
plus Future Fund earnings	1,870	24	1,894	3,382
Equals headline cash balance	2,009	3,640	5,649	22,766

Australian Government General Government Sector – STATEMENT OF OTHER ECONOMIC FLOWS

	ACTUAL 2007-2008 YTD December $m	ACTUAL 2007-2008 YTD January $m	MYFEO ESTIMATE 2007-2008 FULL YEAR* $m
Opening net worth	2,689	2,689	2,689
Opening net worth adjustments(a)	8,291	8,291	8,291
Adjusted opening net worth	10,980	10,980	10,980
Change in net worth from operating transactions	5,220	11,290	17,554
Change in net worth from other economic flows
Revaluation of equity(b)	91	-87	608
Net writedowns of assets (including bad and doubtful debts)	-1,663	-3,557	-2,229
Assets recognised for the first time	-81	-95	7
Net foreign exchange gains	-1	95	0
Net swap interest received	-50	-65	-113
Market valuation of debt	17	-384	-381
Other economic revaluations(c)	928	1,027	419
Total other economic flows	-758	-3,065	-1,689
Closing net worth	15,442	19,205	26,845

(a) Change in net worth arising from a change in 06-07 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 December $m	ACTUAL 2007-2008 January $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
GFS Expenses by Purpose
General Public Services	8,944	2,285	11,228	15,973
Defence	8,447	1,091	9,538	19,243
Public Order and Safety	1,901	253	2,154	3,772
Education	10,782	2,937	13,718	17,386
Health	21,460	3,336	24,796	43,357
Social Security and Welfare	48,021	7,435	55,456	95,132
Housing and Community Amenities	1,383	226	1,609	3,345
Recreation and Culture	1,310	191	1,501	2,861
Fuel and Energy	2,417	460	2,877	5,310
Agriculture, Forestry and Fishing	1,665	307	1,971	3,685
Mining and Mineral Resources (other than fuels); Manufacturing and Construction	857	72	929	2,046
Transport and Communication	1,987	252	2,240	4,484
Other Economic Affairs	2,942	414	3,356	6,122
Other Purposes
Public Debt Interest	1,744	304	2,048	3,517
Nominal Superannuation Interest	1,022	170	1,192	6,276
General Purpose Inter-Government Transactions	22,835	1,451	24,286	44,965
Natural Disaster Relief	304	15	320	103
Contingency Reserve (a)	22	-3	18	282
Total GFS Expenses	138,041	21,197	159,238	277,860

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

NOTES:

The framework used as a basis for these statements and notes is 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.

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.

Note 1: Income Tax

	ACTUAL 2007-2008 YTD December $m	ACTUAL 2007-2008 January $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
INDIVIDUALS AND OTHER WITHHOLDING TAX
Gross income tax withholding	56,892	8,447	65,340	113,330
Gross other individuals	11,739	757	12,497	28,110
Less refunds	14,376	683	15,059	19,790
Total individuals and other withholding tax	54,256	8,521	62,777	121,650
OTHER SOURCES
Companies	30,968	10,636	41,604	65,250
Superannuation funds (a)	7,496	816	8,312	10,130
Petroleum Resource Rent Tax	1,094	463	1,556	2,060
Fringe Benefits tax (b)	1,720	669	2,388	3,970
Total income tax from other sources	41,278	12,583	53,861	81,410
Total income tax	95,534	21,105	116,639	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 December $m	ACTUAL 2007-2008 January $m	ACTUAL 2007-2008 YTD January $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Excise duty	12,211	1,781	13,992	23,090
Customs duty	3,097	523	3,620	6,010
Other indirect tax (including GST)	23,362	2,662	26,024	47,241
Total indirect tax revenue	38,670	4,966	43,636	76,341