Media Release

Senator the Hon Penny Wong
Minister for Finance and Deregulation

02/12
10 February 2012

Australian Government Monthly Financial Statements
December 2011

KEY POINTS

The underlying cash balance for the 2011-12 financial year to 31 December 2011 was a deficit of $27,443 million.
The fiscal balance for the 2011-12 financial year to 31 December 2011 was a deficit of $24,817 million.

AGGREGATES	ACTUAL 2011-2012 December $m	ACTUAL 2011-2012 YTD December $m	MYEFO Profile 2011-2012 YTD December $m	MYEFO ESTIMATE* 2011-2012 FULL YEAR $m
Revenue	24,580	158,367	161,079	344,110
Expenses	31,527	182,352	182,715	371,747
Net operating balance	-6,947	-23,985	-21,636	-27,637
Net capital investment	181	832	615	4,813
Fiscal balance	-7,129	-24,817	-22,251	-32,450
Underlying Cash Receipts	24,280	152,839	155,677	332,977
Underlying Cash Payments	29,487	180,282	181,811	370,090
Underlying cash balance(a)	-5,207	-27,443	-26,134	-37,113
Headline cash balance	-6,939	-30,263	-27,279	-43,334
Total assets		324,709		328,461
Total liabilities		462,687		450,789
Net worth(b)		-137,977		-122,328
Net debt(c)		128,863		132,552

*As published in the 2011-12 MYEFO.
(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.

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 December 2011 was a deficit of $27,443 million, compared to the Mid Year Economic Fiscal Outlook (MYEFO) profile of the underlying cash balance deficit of $26,134 million. The difference of $1,308 million primarily relates to lower than anticipated taxation receipts and lower payments for grants and subsidies, offset by higher payments for goods and services and personal benefit payments.

Fiscal Balance

The fiscal balance for the year to 31 December 2011 was a deficit of $24,817 million. The MYEFO profile of the fiscal balance for 2011-12 is a deficit of $22,251 million. The difference of $2,566 million primarily relates to lower revenue of $2,712 million, lower expenses of $363 million and higher net acquisition of non‑financial assets of $217 million.

FINANCIAL OUTCOMES

Revenues and Expenses

Total revenue was $2,712 million lower than the MYEFO profile estimate for 2011-12 due to lower taxation revenue.

Total expenses were $363 million lower when compared with the MYEFO profile estimate for 2011-12 due to lower than anticipated grants expense and lower wages and salaries expense, offset by higher personal benefit expenditure.

Assets and Liabilities

The net worth of the General Government sector is a negative net asset position of $137,977 million at 31 December 2011.

Senator Penny Wong
Minister for Finance and Deregulation
10 February 2012

David Tune
Secretary to the Department of Finance and Deregulation
10 February 2012

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 December $m	ACTUAL 2011-2012 YTD December $m	MYEFO ESTIMATE* 2011-2012 FULL YEAR $m
Revenue
Taxation revenue	23,082	148,653	323,631
Sales of goods and services	578	3,887	8,050
Interest income	385	2,251	5,190
Dividend income	114	809	1,652
Other	421	2,766	5,587
Total revenue	24,580	158,367	344,110
Expenses
Gross operating expenses
Wages and salaries(a)	1,450	9,014	19,374
Superannuation	363	2,089	4,177
Depreciation and amortisation	471	2,917	5,733
Supply of goods and services	6,303	35,176	70,425
Other operating expenses(a)	368	2,581	4,624
Total gross operating expenses	8,956	51,777	104,333
Superannuation interest expense	612	3,670	7,351
Interest expenses	1,089	6,383	12,983
Current transfers
Current grants	9,560	51,657	111,799
Subsidy expenses	840	4,719	9,782
Personal benefits	9,434	57,074	110,787
Total current transfers	19,834	113,449	232,368
Capital transfers
Mutually agreed write-downs	70	1,049	2,267
Other capital grants	967	6,023	12,445
Total capital transfers	1,037	7,072	14,712
Total expenses	31,527	182,352	371,747
Net operating balance	-6,947	-23,985	-27,637
Other economic flows
Gain/loss on equity and on sale of assets(b)	-688	-3,030	-1,875
Net write-downs of assets(including bad and doubtful debts)	-172	-1,648	-5,376
Assets recognised for the first time	36	183	517
Actuarial revaluations	0	0	-819
Net foreign exchange gains	251	-220	-527
Net swap interest received	-35	-150	45
Market valuation of debt	-1,584	-13,533	-7,628
Other economic revaluations(c)	9	-208	-84
Total other economic flows	-2,183	-18,606	-15,747
Comprehensive result - Total change in net worth	-9,131	-42,591	-43,383
Net operating balance	-6,947	-23,985	-27,637
Net acquisition of non-financial assets
Purchases of non-financial assets	610	3,625	10,013
less Sales of non-financial assets	13	128	612
less Depreciation	471	2,917	5,733
plus Change in inventories	41	160	638
plus Other movements in non-financial assets	15	92	508
Total net acquisition of non-financial assets	181	832	4,813
Fiscal balance (Net lending/borrowing)(d)	-7,129	-24,817	-32,450

*As published in the 2011-12 MYEFO.
(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 December 2011 $m	MYEFO ESTIMATE* as at 30 June 2012 $m
Assets
Financial assets
Cash and deposits	4,278	2,484
Advances paid	28,216	29,790
Investments, loans and placements	98,130	97,990
Other receivables	38,161	37,011
Equity investments
Investments in other public sector entities	22,345	21,858
Equity accounted investments	312	318
Investments - shares	26,713	29,110
Total financial assets	218,154	218,560
Non-financial assets
Land	8,485	8,661
Buildings	22,620	23,094
Plant, equipment and infrastructure	50,828	52,696
Inventories	6,992	7,031
Intangibles	4,699	5,224
Investment property	536	316
Biological assets	98	36
Heritage and cultural assets	9,460	9,498
Assets held for sale	153	148
Other non-financial assets	2,683	3,196
Total non-financial assets	106,555	109,901
Total assets	324,709	328,461
Liabilities
Interest bearing liabilities
Deposits held	240	209
Government securities	249,838	253,455
Loans	8,623	8,357
Other borrowing	786	796
Total interest bearing liabilities	259,487	262,816
Provisions and payables
Superannuation liability(a)	147,481	133,487
Other employee liabilities	11,401	11,539
Suppliers payable	4,161	4,478
Personal benefits provisions and payable	12,546	13,165
Subsidies provisions and payable	2,079	2,292
Grants provisions and payable	13,752	10,618
Other provisions and payables	11,779	12,394
Total provisions and payables	203,200	187,973
Total liabilities	462,687	450,789
Net worth(b)	-137,977	-122,328
Net financial worth(c)	-244,532	-232,229
Net financial liabilities(d)	266,877	254,087
Net debt(e)	128,863	132,552

*As published in the 2011-12 MYEFO.
(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 December $m	ACTUAL 2011-2012 YTD December $m	MYEFO ESTIMATE* 2011-2012 FULL YEAR $m
Cash receipts from operating activities
Taxes received	23,263	144,354	315,299
Receipts from sales of goods and services	464	3,588	7,970
Interest receipts	297	2,074	4,902
Dividends and income tax equivalents	150	1,251	2,233
Other receipts	267	2,846	5,417
Total operating receipts	24,440	154,113	335,820
Cash payments for operating activities
Payments for employees	-1,897	-12,518	-26,171
Payments for goods and services	-7,209	-37,590	-71,140
Grants and subsidies paid	-9,353	-61,452	-137,057
Interest paid	-945	-5,012	-10,775
Personal benefit payments	-8,951	-57,406	-110,299
Other payments	-419	-2,148	-4,522
Total operating payments	-28,774	-176,126	-359,963
Net cash flows from operating activities	-4,334	-22,013	-24,143
Cash flows from investments in non-financial assets
Sales of non-financial assets	13	128	612
Purchases of non-financial assets	-713	-4,154	-10,009
Net cash flows from investments in non-financial assets	-699	-4,026	-9,397
Net cash flows from investments in financial assets for policy purposes	-1,906	-4,222	-9,677
Cash flows from investments in financial assets for liquidity purposes
Increase in investments	3,981	-1,634	1,475
Net cash flows from investments in financial assets for liquidity purposes	3,981	-1,634	1,475
Cash flows from financing activities
Borrowing (net)	4,487	34,110	43,688
Other financing (net)	-126	-413	-1,939
Net cash flows from financing activities	4,361	33,696	41,749
Net increase/(decrease) in cash held	1,403	1,801	7
Net cash flows from operating activities and investments in non-financial assets (Surplus(+)/deficit(-))	-5,033	-26,039	-33,540
Finance leases and similar arrangements(b)	-1	-2	-117
GFS cash surplus(+)/deficit(-)	-5,033	-26,041	-33,658
less Future Fund earnings	174	1,402	3,455
Equals underlying cash balance (c)	-5,207	-27,443	-37,113
plus net cash flows from investments in financial assets for policy purposes	-1,906	-4,222	-9,677
plus Future fund earnings	174	1,402	3,455
Equals headline cash balance	-6,939	-30,263	-43,334

*As published in the 2011-12 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 2011-2012 December $m	ACTUAL 2011-2012 YTD December $m	MYEFO ESTIMATE* 2011-2012 FULL YEAR $m
Expenses by function
General public services	1,884	10,699	21,849
Defence	1,498	9,906	21,050
Public order and safety	251	1,813	4,012
Education	2,593	14,808	30,016
Health	4,771	29,038	60,944
Social security and welfare	11,448	64,931	124,857
Housing and community amenities	430	2,048	5,871
Recreation and culture	739	1,607	3,375
Fuel and energy	530	2,916	7,021
Agriculture, forestry and fishing	394	1,327	3,569
Mining, manufacturing and construction	246	1,017	2,144
Transport and communication	411	2,869	8,324
Other economic affairs	757	4,673	9,603
Other purposes
Public debt interest	995	5,670	11,623
Nominal superannuation interest	612	3,670	7,351
General purpose inter-government transactions	3,966	25,356	50,479
Natural disaster relief	2	3	512
Contingency reserve	0	0	-853
Total expenses	31,527	182,352	371,747

*As published in the 2011-12 MYEFO.

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 December $m	ACTUAL 2011-2012 YTD December $m	MYEFO ESTIMATE* 2011-2012 FULL YEAR $m
Individuals and other withholding taxes
Gross income tax withholding	12,303	71,071	143,520
Gross other individuals	799	13,548	32,910
less refunds	1,138	19,344	26,600
Total individuals and other withholding taxation	11,964	65,275	149,830
Company tax	3,821	32,242	71,800
Superannuation funds	1,005	5,162	8,990
Resource rent tax	21	995	2,030
Fringe benefits tax	37	1,692	3,530
Total income taxation revenue	16,848	105,365	236,180

*As published in the 2011-12 MYEFO.

Note 2: Indirect Tax

	ACTUAL 2011-2012 December $m	ACTUAL 2011-2012 YTD December $m	MYEFO ESTIMATE* 2011-2012 FULL YEAR $m
Goods and services tax	2,877	24,742	49,750
Wine equalisation tax	64	335	750
Luxury car tax	35	217	480
Excise duty	2,338	13,135	26,960
Customs duty	698	3,532	6,740
Other indirect tax	222	1,326	2,771
Total indirect taxation revenue	6,233	43,288	87,451