Media Release

44/2008
18 December 2008

Australian Government Monthly Financial Statements
September and October 2008

KEY POINTS

The underlying cash balance for the 2008-09 year to 31 October 2008 was a surplus of $234 million.
The fiscal balance for the 2008-09 year to 31 October 2008 was a surplus of $5,637 million.

AGGREGATES	ACTUAL 2008-2009 YTD September $m	ACTUAL 2008-2009 October $m	ACTUAL 2008-2009 YTD October $m	BUDGET ESTIMATE 2008-2009 FULL YEAR* $m
Revenue	67,324	35,957	103,281	313,250
Expenses	70,018	27,179	97,197	303,624
Net operating balance	-2,694	8,778	6,084	9,626
Net capital investment	266	181	447	3,784
Fiscal balance	-2,960	8,579	5,637	5,842
Underlying cash balance	-5,324	5,558	234	5,365
Headline cash balance	-3,804	5,454	1,650	7,078
Total assets	269,802	8,092	277,894	295,563
Total liabilities	205,649	2,676	208,325	225,547
Net worth	64,153	5,415	69,569	70,016
Net debt	-34,229	-3,531	-37,761	-47,181

* As published in the 2008-09 MYEFO.

The Australian Government in the Budget Strategy and Outlook Budget Paper No 1 2008-09 in May 2008 initiated major accounting policy reforms that improved the transparency, reliability and understanding of the government’s financial statements. The government decided that the Budget statements will continue to be based on the Australian Bureau of Statistics (ABS) Government Finance Statistics (GFS) except where Australian Accounting Standards (AAS) provide a better conceptual treatment for specific items. Departures will be limited to complying with either ABS GFS or AAS.

The Australian Government monthly financial statements for 2008-09 have been re-designed to provide information consistent with Budget papers as required under section 54 of the Financial Management and Accountability Act 1997.

Care needs to be taken when comparing monthly or cumulative data across years and to full year estimates. Revenues and expenses 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 underlying cash balance includes cash from operations and net cash provided by investing activities in non-financial assets but excludes the cash earnings for the Future Fund Management Agency.

The underlying cash balance for the year to 31 October 2008 was a surplus of $234 million which is $1,554 million lower than the pro rata MYEFO estimate for 2008-09. The difference primarily reflects lower taxation receipts partially offset by higher than pro rata dividend and interest receipts.

Fiscal Balance

The fiscal balance for the year to 31 October 2008 was a surplus of $5,637 million, which is $3,689 million higher than the pro rata MYEFO estimate for 2008-09.

FINANCIAL OUTCOMES

Revenues and Expenses

Expenses are $4,011 million lower and revenue is $1,136 million lower when compared with the pro rata MYEFO estimate for 2008-09.

Assets and Liabilities

The net worth balance of the General Government sector is a positive net asset position of $69,569 million at 31 October 2008.

Lindsay Tanner MP Minister for Finance and Deregulation 18 December 2008	I J Watt Secretary to the Department of Finance and Deregulation 18 December 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 2008-2009 YTD September $m	ACTUAL 2008-2009 October $m	ACTUAL 2008-2009 YTD October $m	BUDGET ESTIMATE 2008-2009 FULL YEAR* $m
Revenue
Taxation revenue	60,984	34,332	95,315	293,627
Sales of goods and services	1,423	479	1,902	5,803
Interest income	1,651	466	2,117	6,114
Dividend income	1,996	224	2,220	3,238
Other	1,270	457	1,727	4,468
Total revenue	67,324	35,957	103,281	313,250
Expenses
Gross operating expenses
Wages and salaries(a)	3,896	1,293	5,190	15,360
Superannuation	566	279	845	2,925
Depreciation and amortisation	1,324	477	1,801	5,480
Payment for supply of goods and services	13,064	4,926	17,990	55,440
Other operating expenses	1,187	324	1,510	4,301
Total gross operating expenses	20,036	7,300	27,336	83,505
Superannuation interest expense	1,219	866	2,084	6,470
Interest expenses	1,105	385	1,489	5,088
Current transfers
Current grants	21,527	10,647	32,174	93,791
Subsidy expenses	1,883	683	2,566	7,642
Personal benefits	22,288	7,734	30,022	98,940
Total current transfers	45,698	19,064	64,762	200,373
Capital transfers
Mutually agreed write-downs	360	-950	-590	1,722
Other capital grants	1,600	515	2,115	6,466
Total capital transfers	1,960	-435	1,525	8,188
Total expenses	70,018	27,179	97,197	303,624
Net operating balance	-2,694	8,778	6,084	9,626
Other economic flows
Revaluation of equity (b)	360	290	650	-169
Net write-downs of assets (including bad and doubtful debts)	-1,908	-1,893	-3,802	-3,545
Assets recognised for the first time	73	39	112	108
Actuarial revaluations	0	0	0	-34
Net foreign exchange gains	-850	-1,853	-2,703	64
Net swap interest received	-81	-20	-101	-36
Market valuation of debt	-1,970	5	-1,966	-1,512
Other economic revaluations(c)	59	69	129	114
Total other economic flows	-4,317	-3,363	-7,680	-5,011
Comprehensive result -
Total change in net worth	-7,011	5,415	-1,596	4,615
Net operating balance	-2,694	8,778	6,084	9,626
Net acquisition of non-financial assets
Purchases of non-financial assets	1,581	746	2,327	9,017
less Sales of non-financial assets	45	91	136	523
less Depreciation	1,324	477	1,801	5,480
plus Change in inventories	25	-22	3	672
plus Other movements in non-financial assets	29	25	55	97
Total net acquisition of non-financial assets	266	181	447	3,784
Fiscal balance (Net lending/borrowing)(d)	-2,960	8,597	5,637	5,842

* As published in the 2008-09 MYEFO.
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other operating expenses.
(b) Revaluations of equity reflects changes in the market valuation of investments. This line also reflects any equity revaluations at the point of disposal or sale.
(c) largely reflects other revaluation of assets and liabilities.
(d) The term fiscal balance is not used by the ABS.

Australian Government General Government Sector - BALANCE SHEET

	ACTUAL 2008-2009 as at 30 September 2008 $m	ACTUAL 2008-2009 as at 31 October 2008 $m	BUDGET ESTIMATE 2008-2009 as at 30 June 2009 $m
Assets
Financial assets
Cash and deposits	1,032	1,482	868
Advances paid	20,566	21,210	23,125
Investments, loans and placements	80,445	85,543	98,427
Other receivables	31,411	33,633	33,535
Equity investments
Investments in other public sector entities	21,050	20,900	20,876
Equity accounted investments	222	222	234
Investments - shares	25,632	25,468	26,495
Total financial assets	180,358	188,458	203,561
Non-financial assets
Land	7,812	7,832	7,733
Buildings	18,048	18,092	18,949
Plant, equipment and infrastructure	41,908	42,097	44,152
Inventories	6,194	6,134	6,792
Intangibles	2,347	2,373	2,508
Investment property	192	192	191
Biological assets	26	26	29
Heritage and cultural assets	645	591	8,275
Assets held for sale	8,301	8,267	586
Other non-financial assets	3,972	3,831	2,787
Total non-financial assets	89,444	89,436	92,002
Total assets	269,802	277,894	295,563
Liabilities
Interest bearing liabilities
Deposits held	334	344	339
Government securities	59,873	62,438	66,729
Loans	6,891	6,841	7,252
Other borrowing	716	851	919
Total interest bearing liabilities	67,813	70,474	75,239
Provisions and payables
Superannuation liability	100,690	100,963	109,953
Other employee liabilities	9,215	8,781	9,079
Suppliers payable	2,386	2,303	3,614
Personal benefits payable	10,800	10,069	12,943
Subsidies payable	1,356	1,352	1,416
Grants payable	4,674	4,506	5,130
Other provisions and payables	8,714	9,876	8,173
Total provisions and payables	137,835	137,851	150,308
Total liabilities	205,649	208,325	225,547
Net worth(a)	64,153	69,569	70,016
Net financial worth(b)	-25,291	-19,867	-21,986
Net financial liabilities(c)	46,341	40,767	42,863
Net debt(d)(e)	-34,229	-37,761	-47,181

* As published in the 2008-09 MYEFO.
(a) Net worth is calculated as total assets minus total liabilities.
(b) Net financial worth equals total financial assets minus total liabilities. That is, it excludes non-financial assets.
(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, advances received, government securities loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.
(e) The net debt estimates include the expected impact of the Future Fund rebalancing its portfolio allocation by increasing its holding of equities, which are not included in the calculation of net debt.

Australian Government General Government Sector - CASH FLOW STATEMENT

	ACTUAL 2008-2009 YTD September $m	ACTUAL 2008-2009 October $m	ACTUAL 2008-2009 YTD October $m	BUDGET ESTIMATE 2008-2009 FULL YEAR* $m
Cash receipts from operating activities
Taxes received	60,908	32,236	93,144	287,748
Receipts from sales of goods and services	1,585	332	1,917	5,823
Interest receipts	1,757	513	2,270	5,540
Dividends and income tax equivalents	2,081	275	2,356	3,238
Other receipts	923	645	1,567	4,436
Total operating receipts	67,253	34,002	101,254	306,784
Cash payments for operating activities
Payments for employees	-5,052	-2,496	-7,548	-20,898
Payments for goods and services	-13,968	-4,891	-18,859	-56,034
Grants and subsidies paid	-25,114	-10,864	-35,978	-106,534
Interest paid	-1,068	-323	-1,391	-3,934
Personal benefit payments	-23,070	-8,543	-31,613	-97,827
Other payments	-1,116	-161	-1,277	-3,804
Total operating payments	-69,388	-27,277	-96,665	-289,031
Net cash flows from operating activities	-2,136	6,725	4,589	17,753
Cash flows from investments in non-financial assets
Sales of non-financial assets	45	91	136	523
Purchases of non-financial assets	-1,703	-560	-2,264	-8,786
Net cash flows from investments in non-financial assets	-1,658	-469	-2,127	-8,263
Net cash flows from investments in financial assets for policy purposes	239	-649	-410	-1,913
Cash flows from investments in financial assets for liquidity purposes
Increase in investments	4,036	-7,495	-3,459	-13,592
Net cash flows from investments in financial assets for liquidity purposes	4,036	-7,495	-3,459	-13,592
Cash flows from financing activities
Borrowing (net)	-1,292	2,377	1,085	6,494
Other financing (net)	27	-39	-12	-1,650
Net cash flows from financing activities	-1,265	2,338	1,073	4,844
Net increase/(decrease) in cash held	-784	450	-334	-1,171
Net cash flows from operating activities and investments in non-financial assets (Surplus(+)/deficit(-))	-3,794	6,256	2,462	9,490
Finance leases and similar arrangements (b)	-249	-154	-403	-499
GFS cash surplus(+)/deficit(-)	-4,043	6,102	2,059	8,991
less Future Fund earnings	1,281	544	1,825	3,626
Equals underlying cash balance (c)	-5,324	5,558	234	5,365
plus net cash flows from investments in financial assets for policy purposes	239	-649	-410	-1,913
plus Future Fund earnings	1,281	544	1,825	3,626
Equals headline cash balance	-3,804	5,454	1,650	7,078

* As published in the 2008-09 MYEFO.
(a) A positive number denotes a cash inflow; a negative sign 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.
(c) The term underlying cash balance is not used by the ABS.

Australian Government General Government Sector - EXPENSES BY FUNCTION

	ACTUAL 2008-2009 YTD September $m	ACTUAL 2008-2009 October $m	ACTUAL 2008-2009 YTD October $m	BUDGET ESTIMATE 2008-2009 FULL YEAR* $m
Expenses by Purpose
General Public Services	4,999	2,438	7,437	17,320
Defence	4,542	1,602	6,144	17,965
Public Order and Safety	542	234	776	3,857
Education	5,362	1,797	7,159	19,559
Health	11,581	4,116	15,697	46,647
Social Security and Welfare	24,543	9,360	33,903	111,439
Housing and Community Amenities	821	279	1,100	4,335
Recreation and Culture	130	512	642	3,013
Fuel and Energy	1,248	462	1,710	5,811
Agriculture, Forestry and Fishing	504	125	628	3,520
Mining and Mineral Resources (other than fuels); Manufacturing and Construction	338	153	491	1,846
Transport and Communication	1,266	136	1,402	4,808
Other Economic Affairs	1,559	-164	1,395	6,915
Other Purposes
Public Debt Interest	925	316	1,240	3,750
Nominal Superannuation Interest	529	176	705	6,470
General Purpose Inter-
Government Transactions	11,123	5,632	16,755	46,683
Natural Disaster Relief	7	3	10	93
Contingency Reserve (a)	2	1	3	-407
Total Expenses	70,018	27,179	97,197	303,624

* As published in the 2008-09 MYEFO.
(a) Asset sale related expenses are 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 ABS 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 based on the same conceptual framework as the Budget.

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 Business Activity 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 Income Statement.

Note 1: Income Tax

	ACTUAL 2008-2009 YTD September $m	ACTUAL 2008-2009 October $m	ACTUAL 2008-2009 YTD October $m	BUDGET ESTIMATE 2008-2009 FULL YEAR *$m
INDIVIDUALS AND OTHER WITHHOLDING TAX
Gross income tax withholding	30,274	10,424	40,698	119,680
Gross other individuals	5,807	3,073	8,880	31,620
Less refunds	11,138	2,467	13,606	22,600
Total individuals and other withholding tax	24,943	11,030	35,973	128,700
OTHER SOURCES
Companies	14,118	11,873	25,992	68,990
Superannuation funds (a)	2,747	1,603	4,350	9,270
Petroleum Resource Rent Tax	716	957	1,673	2,400
Fringe Benefits tax (b)	642	790	1,433	3,870
Total income tax from other sources	18,224	15,224	33,447	84,530
Total income tax	43,167	26,253	69,420	213,230

* As published in the 2008-09 MYEFO.
(a) Includes superannuation contributions surcharge.
(b) Negative collections indicate refunds exceed collections.

Note 2: Indirect Tax

	ACTUAL 2008-2009 YTD September $m	ACTUAL 2008-2009 October $m	ACTUAL 2008-2009 YTD October $m	BUDGET ESTIMATE 2008-2009 FULL YEAR * $m
Excise duty	5,730	1,867	7,597	24,560
Customs duty	1,586	522	2,107	6,382
Other indirect tax (including GST)	10,502	5,689	16,191	49,456
Total indirect tax revenue	17,817	8,078	25,895	80,397