26/2008
18 July 2008
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.
The 2008-09 Budget adopted a new accounting standard, AASB1049, which harmonises the two standards used in government reporting, GFS and Australian Accounting Standards (AAS). To ensure consistency across the 2007-08 financial year, the monthly financial statements will only reflect this change from
1 July 2008. The primary difference between GFS and AASB1049 is due to the accounting treatment of Defence Weapons Platforms (DWP). Under GFS, DWP are treated as expenses rather than assets, whilst under AASB1049 DWP are treated as assets. This change does not affect the underlying cash balance.
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.
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 May 2008 was a surplus of $18,708 million. This underlying cash balance is $3.3 billion higher than the 2008-09 Budget pro rata. The difference reflects a number of individual variations including the following:
Higher payments compared to pro rata Budget estimates for:
Lower payments compared to pro rata Budget estimates for:
The fiscal balance for the year to 31 May 2008 was a surplus of $28,771 million. This fiscal balance is $10.0 billion higher than the 2008-09 Budget pro rata estimate.
GFS Expenses are $4,493 million lower when compared with a pro rata of the 2008-09 Budget estimate whilst GFS Revenue is $4,891 million higher when compared with a pro rata of the 2008-09 Budget 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.
The net worth balance within the General Government sector is a positive net asset position of $36,098 million at 31 May 2008.
Lindsay Tanner MP |
I J Watt |
Contact: Lindsay Tanner MP’s Office: Nardia Dazkiw - (02) 6277 7400 Department of Finance and Deregulation: Davina Cassell - (02) 6215 3557 |
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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.
