Media Release

Senator the Hon Penny Wong
Minister for Finance and Deregulation

252/2011
9 December 2011

Australian Government Monthly Financial Statements
October 2011

KEY POINTS

The underlying cash balance for the 2011-12 financial year to 31 October 2011 was a deficit of $15,870 million.
The fiscal balance for the 2011-12 financial year to 31 October 2011 was a deficit of $12,088 million.

AGGREGATES	ACTUAL 2011-2012 October $m	ACTUAL 2011-2012 YTD October $m	Budget Profile 2011-2012 YTD October $m	BUDGET ESTIMATE* 2011-2012 FULL YEAR $m
Revenue	39,144	109,023	108,389	349,961
Expenses	28,599	121,076	122,863	365,817
Net operating balance	10,545	-12,052	-14,474	-15,857
Net capital investment	166	35	992	4,405
Fiscal balance	10,379	-12,088	-15,466	-20,262
Underlying Cash Receipts	37,410	105,089	104,613	339,459
Underlying Cash Payments	30,721	120,959	121,810	362,078
Underlying cash balance(a)	6,689	-15,870	-17,197	-22,618
Headline cash balance	6,555	-16,487	-19,447	-31,903
Total assets		329,539		345,173
Total liabilities		446,159		432,705
Net worth(b)		-116,620		-87,532
Net debt(c)		109,109		106,646

*As published in the 2011-12 Budget.
(a) Excludes Future Fund earnings.
(b) Net worth is calculated as total assets minus total liabilities.
(c) Net debt equals the sum of deposits held, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

Care needs to be taken when comparing monthly or cumulative data across years and to full year estimates as revenues and expenses vary from month to month.

Comparators for the October 2011 Monthly Financial Statements are based on the 2011-12 Budget published in May 2011. The 2011-12 Mid-Year Economic and Fiscal Outlook profiles will be used as comparators from the November 2011 Monthly Financial Statements onwards.

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.

The underlying cash balance for the year to 31 October 2011 was a deficit of $15,870 million, compared to the Budget profile of the underlying cash balance deficit of $17,197 million. The difference of $1,328 million primarily relates to higher than anticipated taxation receipts and lower payments for grants and subsidies, offset by higher payments for goods and services.

Fiscal Balance

The fiscal balance for the year to 31 October 2011 was a deficit of $12,088 million. The Budget profile of the fiscal balance for 2011-12 is a deficit of $15,466 million. The difference of $3,378 million primarily relates to higher revenue of $635 million, lower expenses of $1,787 million and lower net acquisition of non‑financial assets of $956 million.

FINANCIAL OUTCOMES

Revenues and Expenses

Total revenue was $635 million higher than the Budget profile estimate for 2011-12 due to higher taxation revenue offset by lower interest income received during October.

Total expenses were $1,787 million lower when compared with the Budget profile estimate for 2011-12 due to lower than anticipated payments of grants.

Assets and Liabilities

The net worth of the General Government sector is a negative net asset position of $116,620 million at 31 October 2011.

Senator Penny Wong Minister for Finance and Deregulation 9 December 2011	David Tune Secretary to the Department of Finance and Deregulation 9 December 2011
Contact: Senator Penny Wong's Office: Laura Anderson - (02) 6277 7400 Department of Finance and Deregulation: Lauren Alcantara - (02) 6215 3557

Australian Government General Government Sector – INCOME STATEMENT

	ACTUAL 2011-2012 October $m	ACTUAL 2011-2012 YTD October $m	BUDGET ESTIMATE* 2011-2012 FULL YEAR $m
Revenue
Taxation revenue	37,242	102,401	329,247
Sales of goods and services	701	2,634	8,050
Interest income	621	1,498	5,735
Dividend income	223	565	1,328
Other	358	1,925	5,601
Total revenue	39,144	109,023	349,961
Expenses
Gross operating expenses
Wages and salaries(a)	1,427	6,042	19,232
Superannuation	344	1,364	3,508
Depreciation and amortisation	427	1,967	5,636
Supply of goods and services	5,357	22,924	69,993
Other operating expenses(a)	471	1,781	4,498
Total gross operating expenses	8,026	34,077	102,866
Superannuation interest expense	612	2,446	7,575
Interest expenses	1,088	4,227	13,095
Current transfers
Current grants	8,450	35,086	112,995
Subsidy expenses	640	3,070	9,300
Personal benefits	8,897	38,288	107,931
Total current transfers	17,987	76,444	230,226
Capital transfers
Mutually agreed write-downs	174	796	2,197
Other capital grants	713	3,084	9,858
Total capital transfers	886	3,881	12,055
Total expenses	28,599	121,076	365,817
Net operating balance	10,545	-12,052	-15,857
Other economic flows
Gain/loss on equity and on sale of assets(b)	-1,554	-2,581	2,897
Net write-downs of assets(including bad and doubtful debts)	-548	-1,102	-6,567
Assets recognised for the first time	25	109	583
Net foreign exchange gains	2,940	272	2
Market valuation of debt	1,677	-5,662	-266
Other economic revaluations(c)	334	-142	-56
Total other economic flows	2,799	-9,181	-3,406
Comprehensive result - Total change in net worth	13,344	-21,233	-19,263
Net operating balance	10,545	-12,052	-15,857
Net acquisition of non-financial assets
Purchases of non-financial assets	544	2,007	10,561
less Sales of non-financial assets	17	107	1,361
less Depreciation	427	1,967	5,636
plus Change in inventories	42	32	579
plus Other movements in non-financial assets	24	69	264
Total net acquisition of non-financial assets	166	35	4,405
Fiscal balance (Net lending/borrowing)(d)	10,379	-12,088	-20,262

*As published in the 2011-12 Budget.
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other operating expenses. Total employee expenses equal wages and salaries plus other operating expenses.
(b) Reflects changes in the market valuation of investments and any 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 as at 31 October 2011 $m	BUDGET ESTIMATE* as at 30 June 2012 $m
Assets
Financial assets
Cash and deposits	2,797	2,000
Advances paid	27,161	29,501
Investments, loans and placements	104,258	110,443
Other receivables	39,766	34,847
Equity investments
Investments in other public sector entities	22,022	26,277
Equity accounted investments	316	279
Investments - shares	27,241	28,746
Total financial assets	223,561	232,092
Non-financial assets
Land	8,574	8,438
Buildings	22,535	23,127
Plant, equipment and infrastructure	50,487	53,379
Inventories	6,901	6,978
Intangibles	4,611	5,330
Investment property	529	349
Biological assets	100	35
Heritage and cultural assets	9,460	9,435
Assets held for sale	127	91
Other non-financial assets	2,653	5,920
Total non-financial assets	105,978	113,080
Total assets	329,539	345,173
Liabilities
Interest bearing liabilities
Deposits held	244	232
Government securities	233,106	234,885
Loans	9,153	12,694
Other borrowing	822	780
Total interest bearing liabilities	243,325	248,590
Provisions and payables
Superannuation liability(a)	146,830	133,965
Other employee liabilities	11,194	11,209
Suppliers payable	4,639	4,352
Personal benefits provisions and payable	12,161	12,420
Subsidies provisions and payable	2,183	2,385
Grants provisions and payable	11,921	8,063
Other provisions and payables	13,906	11,722
Total provisions and payables	202,834	184,115
Total liabilities	446,159	432,705
Net worth(b)	-116,620	-87,532
Net financial worth(c)	-222,597	-200,613
Net financial liabilities(d)	244,620	226,889
Net debt(e)	109,109	106,646

*As published in the 2011-12 Budget.
(a) For budget reporting purposes, a discount rate applied by actuaries in preparing Long Term Cost Reports is used to value the superannuation liability. This reduces the volatility in reported liabilities that would occur from year to year if the long-term government bond rate were used. Consistent with Australian Accounting Standards, the long-term government bond rate as at 30 June is used to calculate the superannuation liability for the purpose of actuals reporting.
(b) Net worth is calculated as total assets minus total liabilities.
(c) Net financial worth equals total financial assets minus total liabilities.
(d) Net financial liabilities equals total liabilities less financial assets other than investments in other public sector entities.
(e) Net debt equals the sum of deposits held, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

Australian Government General Government Sector - CASH FLOW STATEMENT

	ACTUAL 2011-2012 October $m	ACTUAL 2011-2012 October YTD $m	BUDGET ESTIMATE* 2011-2012 FULL YEAR $m
Cash receipts from operating activities
Taxes received	34,793	98,923	321,103
Receipts from sales of goods and services	961	2,686	7,996
Interest receipts	260	1,405	5,297
Dividends and income tax equivalents	288	1,059	1,422
Other receipts	1,156	2,045	5,211
Total operating receipts	37,459	106,118	341,029
Cash payments for operating activities
Payments for employees	-1,670	-8,339	-25,786
Payments for goods and services	-5,315	-25,107	-70,308
Grants and subsidies paid	-12,079	-42,424	-132,428
Interest paid	-1,039	-2,057	-10,833
Personal benefit payments	-8,602	-38,950	-107,848
Other payments	-694	-1,485	-4,272
Total operating payments	-29,401	-118,361	-351,474
Net cash flows from operating activities	8,058	-12,243	-10,445
Cash flows from investments in non-financial assets
Sales of non-financial assets	17	107	1,361
Purchases of non-financial assets	-1,320	-2,596	-10,487
Net cash flows from investments in non-financial assets	-1,303	-2,490	-9,126
Net cash flows from investments in financial assets for policy purposes	-201	-1,753	-12,216
Cash flows from investments in financial assets for liquidity purposes
Increase in investments	-13,170	-7,081	-4,012
Net cash flows from investments in financial assets for liquidity purposes	-13,170	-7,081	-4,012
Cash flows from financing activities
Borrowing (net)	7,166	24,110	36,693
Other financing (net)	-121	-223	-893
Net cash flows from financing activities	7,044	23,887	35,800
Net increase/(decrease) in cash held	429	320	2
Net cash flows from operating activities and investments in non-financial assets (Surplus(+)/deficit(-))	6,755	-14,732	-19,571
Finance leases and similar arrangements(b)	0	-2	-117
GFS cash surplus(+)/deficit(-)	6,755	-14,734	-19,687
less Future Fund earnings	66	1,136	2,931
Equals underlying cash balance (c)	6,689	-15,870	-22,618
plus net cash flows from investments in financial assets for policy purposes	-201	-1,753	-12,216
plus Future fund earnings	66	1,136	2,931
Equals headline cash balance	6,555	-16,487	-31,903

*As published in the 2011-12 Budget.
(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 2011-2012 October $m	ACTUAL 2011-2012 YTD October $m	BUDGET ESTIMATE* 2011-2012 FULL YEAR $m
Expenses by function
General public services	1,713	6,809	20,887
Defence	1,543	6,476	21,277
Public order and safety	403	1,275	3,969
Education	1,470	10,645	29,870
Health	4,977	19,212	59,858
Social security and welfare	9,740	43,292	121,907
Housing and community amenities	257	1,358	4,647
Recreation and culture	235	963	3,397
Fuel and energy	450	1,906	6,302
Agriculture, forestry and fishing	285	710	3,444
Mining, manufacturing and construction	139	632	2,014
Transport and communication	518	1,710	6,919
Other economic affairs	697	3,059	9,385
Other purposes
Public debt interest	981	3,710	11,632
Nominal superannuation interest	612	2,446	7,575
General purpose inter-government transactions	4,591	16,874	51,152
Natural disaster relief	-9	0	479
Contingency reserve	0	0	1,103
Total expenses	28,599	121,076	365,817

*As published in the 2011-12 Budget.

NOTES:

The Australian Government monthly financial statements have been prepared on a basis consistent with the Budget as required under section 54 of the Financial Management and Accountability Act 1997. The statements are 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 are limited to complying with either ABS GFS or AAS.

In response to the report titled ‘Review of Operation Sunlight: Overhauling Budgetary Transparency’, the Australian Government has improved the transparency and accountability of the Monthly Financial Statements by reporting against a profile of expected revenue and expenses. This allows for a more accurate commentary and account for seasonality or patterns of revenue and expenses.

The Government is committed to releasing the Monthly Financial Statements in a timely fashion and will endeavour to do so in accordance with International Monetary Fund (IMF) Special Data Dissemination Standards. Under these standards the timeframe for releasing the Monthly Financial Statements is by the end of the following month. The exception is the July Monthly Financial Statements, for which the IMF has given Australia special dispensation to release before 30 September.

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 2011-2012 October $m	ACTUAL 2011-2012 YTD October $m	BUDGET ESTIMATE* 2011-2012 FULL YEAR $m
Individuals and other withholding taxes
Gross income tax withholding	10,898	46,516	144,930
Gross other individuals	4,646	11,129	33,360
less refunds	2,683	15,928	27,400
Total individuals and other withholding taxation	12,861	41,718	150,890
Company tax	12,396	25,660	74,600
Superannuation funds	1,155	3,362	9,330
Resource rent tax	504	942	2,050
Fringe benefits tax	881	1,589	3,760
Total income taxation revenue	27,797	73,271	240,630

*As published in the 2011-12 Budget.

Note 2: Indirect Tax

	ACTUAL 2011-2012 October $m	ACTUAL 2012-2012 YTD October $m	BUDGET ESTIMATE* 2012-2012 FULL YEAR $m
Goods and services tax	6,123	17,180	50,630
Wine equalisation tax	45	206	760
Luxury car tax	40	150	510
Excise duty	2,328	8,551	26,330
Customs duty	608	2,180	7,520
Other indirect tax	301	863	2,867
Total indirect taxation revenue	9,444	29,130	88,617