Media Release

14/2008
24 April 2008

Australian Government Monthly Financial Statements
February 2008

KEY POINTS

The underlying cash balance for the 2007-08 year to 29 February 2008 was a surplus of $5,492 million.
The fiscal balance for the 2007-08 year to 29 February 2008 was a surplus of $13,507 million.

AGGREGATES	ACTUAL 2007-2008 YTD January $m	ACTUAL 2007-2008 February $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Revenue	170528	28205	198733	295415
Expenses	159238	25095	184332	277860
Net operating balance	11290	3111	14401	17554
Net capital investment	709	185	894	1592
Fiscal balance	10581	2926	13507	15962
Underlying cash balance	3367	2125	5492	14834
Headline cash balance	5649	2162	7811	22766
Total assets	221949	5148	227096	235584
Total liabilities	202744	1343	204086	208739
Net worth	19205	3805	23010	26845
Net debt	-26489	-2568	-29058	-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 29 February 2008 was a surplus of $5,492 million. This underlying cash balance is $4.4 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 receipts typically due to timing of collections.

Movements in underlying cash payments:

Higher payments compared to pro rata MYEFO estimates for:

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

Lower payments compared to pro rata MYEFO estimates for:

Payment to suppliers primarily due to the timing of payments.

Fiscal Balance

The fiscal balance for the year to 29 February 2008 was a surplus of $13,507 million. This fiscal balance is $2,865 million higher than the 2007-08 MYEFO pro rata estimate.

FINANCIAL OUTCOMES

Revenues and Expenses

GFS Expenses are $908 million lower when compared with a pro rata of the 2007-08 MYEFO estimate whilst GFS Revenue is $1,790 million higher when compared with a pro rata of the 2007-08 MYEFO estimate.

The main reason for the lower expenses are due to the timing of payments to suppliers and personal benefit payments, whilst higher 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 $23,010 million at 29 February 2008.

Lindsay Tanner MP Minister for Finance and Deregulation 24 April 2008	I J Watt Secretary to the Department of Finance and Deregulation 24 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 January $m	ACTUAL 2007-2008 February $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
GFS revenue
Taxation revenue	160,275	27,063	187,338	279,401
Sales of goods and services	3,134	386	3,520	5,191
Interest income	2,754	496	3,249	4,663
Dividend income	1,884	103	1,987	2,707
Other	2,482	158	2,640	3,451
Total GFS revenue	170,528	28,205	198,733	295,415
GFS expenses
Gross operating expenses
Depreciation	1,472	213	1,685	2,483
Superannuation	1,519	224	1,743	2,675
Salaries and wages	8,537	1,213	9,750	15,093
Payment for supply of goods and services	30,820	4,401	35,221	58,056
Other operating expenses	2,197	326	2,523	3,314
Total gross operating expenses	44,544	6,377	50,921	81,620
Nominal superannuation interest expense	3,503	500	4,004	6,276
Other interest expenses	2,375	348	2,724	3,992
Current transfers
Grant expenses	51,436	10,140	61,576	87,139
Subsidy expenses	4,318	629	4,947	7,314
Personal benefit payments in cash	49,123	6,500	55,623	84,487
Total current transfers	104,877	17,268	122,146	178,940
Capital transfers	3,938	600	4,538	7,031
Total GFS expenses	159,238	25,095	184,332	277,860
Net operating balance	11,290	3,111	14,401	17,554
Net acquisition of non-financial assets
Purchases of non-financial assets	1,878	335	2,213	3,715
less Sales of non-financial assets	106	16	122	256
less Depreciation	1,472	213	1,685	2,483
plus Change in inventories	295	69	364	238
plus Other movements in non-financial assets	113	10	123	378
Total net acquisition of non-financial assets	709	185	894	1,592
Net lending/fiscal balance	10,581	2,926	13,507	15,962

Australian Government General Government Sector – BALANCE SHEET

	ACTUAL 2007-2008 YTD January $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 30-Jun-08 $m
GFS assets
Financial assets
Cash and deposits	612	1,358	1,043
Advances paid	22,034	22,020	25,013
Investments, loans and placements	68,090	69,852	57,039
Other non-equity assets	41,246	43,055	30,625
Equity	41,418	42,108	72,191
Total financial assets	173,400	178,392	185,911
Non-financial assets
Land	6,897	6,914	6,940
Buildings	16,875	16,930	16,981
Plant, equipment and infrastructure	10,227	10,219	10,931
Inventories	3,398	3,455	3,486
Heritage and cultural assets	8,221	8,227	8,245
Other non-financial assets	2,930	2,960	3,090
Total non-financial assets	48,548	48,704	49,673
Total GFS assets	221,949	227,096	235,584
GFS liabilities
Deposits held	318	310	263
Government securities	58,035	57,934	59,288
Loans	5,521	5,514	7,085
Other borrowings	372	414	365
Superannuation liability	104,919	105,256	106,879
Other employee entitlements and provisions	8,260	8,408	8,479
Other non-equity liabilities	25,318	26,251	26,381
Total GFS liabilities	202,744	204,086	208,739
Net worth	19,205	23,010	26,845
Net financial worth	-29,343	-25,694	-22,828
Net debt	-26,489	-29,058	-16,094

Australian Government General Government Sector – CASH FLOW STATEMENT

	ACTUAL 2007-2008 YTD January $m	ACTUAL 2007-2008 February $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 2007-2008 FULL YEAR* $m
Cash receipts from operating activities
Taxes received	154,341	25,789	180,129	274,115
Receipts from sales of goods and services	3,162	390	3,551	5,188
Interest receipts	2,008	242	2,250	4,482
Dividends	1,870	59	1,929	2,692
Other receipts	2,257	88	2,345	3,150
Total operating receipts	163,638	26,567	190,205	289,628
Cash payments for operating activities
Payments for goods and services	-31,724	-3,725	-35,448	-57,977
Grants and subsidies paid	-59,269	-11,809	-71,078	-98,849
Interest paid	-2,021	-418	-2,440	-3,646
Personal benefit payments	-50,598	-6,388	-56,985	-83,983
Salaries, wages and other entitlements	-11,336	-1,518	-12,854	-20,044
Other payments for operating activities	-2,307	-248	-2,555	-3,272
Total operating payments	-157,255	-24,106	-181,360	-267,771
Net cash flows from operating activities	6,383	2,461	8,845	21,857
Cash flows from investments in non-financial assets
Sales of non-financial assets	110	17	126	301
Purchases of non-financial assets	-1,200	-278	-1,478	-3,938
Net cash flows from investments in non-financial assets	-1,090	-262	-1,352	-3,637
Net cash flows from investments in financial assets for policy purposes	388	10	398	4,550
Cash flows from investments in financial assets for liquidity purposes
Increase in investments	-7,303	-1,531	-8,834	-24,884
Net cash flows from investments in financial assets for liquidity purposes	-7,303	-1,531	-8,834	-24,884
Cash flows from financing activities
Borrowing (net)	1,164	-147	1,017	2,542
Deposits received (net)	57	-8	49	0
Other financing (net)	-141	222	82	-540
Net cash flows from financing activities	1,080	67	1,147	2,002
Net increase/decrease in cash held	-542	746	204	-112
Net cash from operating activities and investments in non-financial assets	5,293	2,200	7,493	18,220
Finance leases and similar arrangements	-32	-48	-79	-4
GFS cash surplus(+)/deficit(-)	5,261	2,152	7,413	18,216
less Future Fund earnings	1,894	27	1,921	3,382
Equals underlying cash balance	3,367	2,125	5,492	14,834
plus net cash flows from investments in financial assets for policy purposes	388	10	398	4,550
plus Future Fund earnings	1,894	27	1,921	3,382
Equals headline cash balance	5,649	2,162	7,811	22,766

Australian Government General Government Sector – STATEMENT OF OTHER ECONOMIC FLOWS

	ACTUAL 2007-2008 YTD January $m	ACTUAL 2007-2008 YTD February $m	BUDGET 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	11,290	14,401	17,554
Change in net worth from other economic flows
Revaluation of equity(b)	-87	827	608
Net writedowns of assets (including bad and doubtful debts)	-3,557	-3,606	-2,229
Assets recognised for the first time	-95	-94	7
Net foreign exchange gains	95	94	0
Net swap interest received	-65	-81	-113
Market valuation of debt	-384	-430	-381
Other economic revaluations(c)	1,027	920	419
Total other economic flows	-3,065	-2,371	-1,689
Closing net worth	19,205	23,010	26,845

Australian Government General Government Sector – INCOME STATEMENT BY FUNCTION

	ACTUAL 2007-2008 YTD January $m	ACTUAL 2007-2008 February $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 2007-2008 FULL YEAR $m
GFS Expenses by Purpose
General Public Services	11,228	1,604	12,833	15,973
Defence	9,538	1,380	10,918	19,243
Public Order and Safety	2,154	260	2,415	3,772
Education	13,718	1,238	14,956	17,386
Health	24,796	3,620	28,416	43,357
Social Security and Welfare	55,456	7,391	62,847	95,132
Housing and Community Amenities	1,609	234	1,843	3,345
Recreation and Culture	1,501	171	1,672	2,861
Fuel and Energy	2,877	413	3,290	5,310
Agriculture, Forestry and Fishing	1,971	422	2,393	3,685
Mining and Mineral Resources (other than fuels); Manufacturing and Construction	929	162	1,091	2,046
Transport and Communication	2,240	273	2,512	4,484
Other Economic Affairs	3,356	439	3,795	6,122
Other Purposes
Public Debt Interest	2,048	286	2,334	3,517
Nominal Superannuation Interest	1,192	170	1,362	6,276
General Purpose Inter-Government Transactions	24,286	6,938	31,224	44,965
Natural Disaster Relief	320	91	410	103
Contingency Reserve (a)	18	3	21	282
Total GFS Expenses	159,238	25,095	184,332	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 January $m	ACTUAL 2007-2008 February $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 2007-2008 FULL YEAR $m
INDIVIDUALS AND OTHER WITHHOLDING TAX
Gross income tax withholding	65,340	10,979	76,318	113,330
Gross other individuals	12,497	2,919	15,415	28,110
Less refunds	15,059	740	15,799	19,790
Total individuals and other withholding tax	62,777	13,157	75,934	121,650
OTHER SOURCES
Companies	41,604	3,320	44,925	65,250
Superannuation funds (a)	8,312	1,093	9,405	10,130
Petroleum Resource Rent Tax	1,556	- 91	1,466	2,060
Fringe Benefits tax (b)	2,388	212	2,601	3,970
Total income tax from other sources	53,861	4,535	58,396	81,410
Total income tax	116,639	17,691	134,330	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 January $m	ACTUAL 2007-2008 February $m	ACTUAL 2007-2008 YTD February $m	MYEFO ESTIMATE 2007-2008 FULL YEAR $m
Excise duty	13,992	1,652	15,644	23,090
Customs duty	3,620	478	4,098	6,010
Other indirect tax (including GST)	26,024	7,241	33,265	47,241
Total indirect tax revenue	43,636	9,371	53,008	76,341