Australian Government Monthly Financial Statements

2 November 200461/2004

AUSTRALIAN GOVERNMENT MONTHLY FINANCIAL STATEMENTS

SEPTEMBER 2004

KEY POINTS

• The underlying cash balance for the year to 30 September 2004 was a deficit of $2,895 million in comparison to a surplus of $2,160 million to 31 August 2004.
• The fiscal balance for the year to 30 September 2004 was a surplus of $1,778 million in comparison to a surplus of $6,822 million to 31 August 2004.
• The net operating result for the year to 30 September 2004 was a surplus of $1,109 million.

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
AGGREGATES / September / Year to Date September / FULL YEAR*
$m / $m / $m
Underlying Cash Balance / -5,056 / -2,895 / 2,391
Fiscal Balance / -5,044 / 1,778 / 698
Headline Cash Balance / -4,902 / -2,672 / 1,017
Revenue (a) / 10,115 / 45,863 / 196,308
Expenses (a) / 15,488 / 44,753 / 196,663
Operating Result / -5,372 / 1,109 / -355
Assets / 136,867 / 136,867 / 128,979
Liabilities / 178,056 / 178,056 / 174,558
Net Assets (a) / -41,189 / -41,189 / -45,579
* As published in the Budget Strategy and Outlook 2004-05.
(a) Revenue, expenses and net assets are on a AAS31 basis, unless otherwise indicated.

Care needs to be taken when comparing monthly or cumulative data across years and to full year estimates. Revenue and expenses vary month-to-month and factors such as The New Tax System, the accrual framework, the timing of payments and policy decisions, can also 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 30 September 2004 was a deficit of $2,895 million. This underlying cash balance is $3,493 million lower than the September pro-rata (a surplus of $598 million) of the Budget annual estimate of $2,391 million. The difference reflects a number of individual variations including the following:

Movements in underlying cash receipts:

• Taxation receipts are lower than a pro-rata of the annual Budget estimate. This is in line with the usual monthly fluctuations in taxation receipts.
• Higher dividends largely due to the receipt of the Reserve Bank of Australia dividend in August 2004.

Movements in underlying cash payments:

Lower payments for:

• Grants due to Budget Balancing Assistance as these payments have now ceased because GST receipts exceed the Guaranteed Minimum Amount from 2004-2005, and National Competition Policy payments which are scheduled to occur in November 2004.

Higher payments for:

• Personal Benefits due to a greater than pro-rata number of personal benefits paydays falling due in September 2004.
• Higher education institutions, including a Higher Education Contributions Scheme (HECS) component:
• Payments to universities are initially recorded as grant related payments, as HECS funding information is not known. This has an initial effect on underlying cash, which is reversed when the HECS funding is known and reclassified as loans in November/December and June each year.

fiscal balance

The fiscal balance for the year to date 30 September 2004 was a surplus of $1,778 million. The main components of the fiscal balance are the GFS net operating balance, which was a surplus of $1,464 million, and a net capital investment of $314million for the year to 30 September 2004 (refer to the Reconciliation of AAS31 Operating Result to Fiscal Balance on page 8 for further detail).

FINANCIAL OUTCOMES

Actual expenses are $4,413 million lower when compared with a pro-rata of the Budget estimate. The main reasons for the lower result (including their impact by Function) are due to:

• Education function - lower expenses for most education and training grants. In accordance with legislation, a large proportion of education and training grants are expensed between December and February of each year when the determinations are signed. These grants are then paid to institutions throughout the calendar year.

assets and liabilities

The net asset balance within the General Government sector is a negative net asset position of $41,189 million at 30 September 2004.

Nick MinchinIJ Watt

Minister for FinanceSecretary to the Department of

and AdministrationFinance and Administration

2 November 2004

Contact:Senator Minchin’s Office:Michael Brennan(02) 6277 7400

Department of Finance and Administration:Anne Hazell(02) 6215 3158

Chief Finance Officer

Australian Government Reporting

Australian Government General Government Sector –

Statement of Financial Performance

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
Note / $m / $m / $m
Revenues
Taxation
Income tax / 1 / 6,412 / 32,889 / 150,100
Indirect tax / 2 / 2,474 / 7,289 / 27,545
GST / 0 / 0 / 0
Fringe Benefits Tax / 1 / -39 / 647 / 3,190
Other taxes / 132 / 369 / 1,642
Total Taxation Revenue / 3 / 8,978 / 41,194 / 182,477
Non-Taxation
Sales of goods and services / 384 / 1,105 / 4,369
Interest and dividends / 272 / 2,459 / 5,844
Net foreign exchange gains / -6 / 0 / 0
Proceeds from the sale of assets / 132 / 212 / 915
Other sources of non-tax revenue / 355 / 892 / 2,703
Total Non-Tax Revenue / 1,137 / 4,668 / 13,831
Total Revenues / 10,115 / 45,863 / 196,308
Expenses
Goods and Services
Employees / 1,826 / 5,220 / 21,368
Suppliers / 1,227 / 3,604 / 16,099
Depreciation and amortisation / 332 / 1,009 / 4,300
Net write down of assets / 146 / 451 / 1,881
Net foreign exchange losses / 201 / 201 / 0
Value of assets sold / 67 / 138 / 813
Other goods and services expenses / 606 / 1,902 / 7,533
Total Goods and Services / 4,405 / 12,525 / 51,994
Subsidies Benefits and Grants
Personal benefits / 8,092 / 22,454 / 88,713
Subsidies / 770 / 2,618 / 10,386
Grants / 1,695 / 5,575 / 39,378
Total Subsidies Benefits and Grants / 10,557 / 30,648 / 138,477
Borrowing costs
Interest / 518 / 1,571 / 6,170
Other borrowing costs / 8 / 9 / 22
Total Borrowing costs / 525 / 1,580 / 6,192
Total Expenses / 15,488 / 44,753 / 196,663
Operating Result / -5,372 / 1,109 / -355
Extraordinary items / 0 / 0 / 0
Operating result after extraordinary items / -5,372 / 1,109 / -355
This table is prepared on a AAS 31 basis, unless otherwise indicated.
* As published in the Budget Strategy and Outlook 2004-05.
* Reduced depreciation expense reflects a revision to accumulated depreciation following a review of Defence assets.

Australian Government General Government Sector –

Statement of Financial Position

ACTUAL / ESTIMATE
2004-2005 / 2004-2005
September / FULL YEAR*
Note / $m / $m
Assets
Financial assets
Cash / 1,428 / 1,553
Receivables / 28,831 / 31,960
Investments / 33,189 / 25,075
Equity Accounted Investments / 401 / 451
Accrued revenue / 519 / 347
Other financial assets / 1 / 24
Total financial assets / 64,369 / 59,410
Non-financial assets
Land and buildings / 19,301 / 17,786
Infrastructure / 38,772 / 39,652
Intangibles / 1,557 / 1,527
Heritage and cultural / 6,442 / 4,950
Inventories / 4,845 / 4,195
Other non-financial assets / 1,581 / 1,460
Total non-financial assets / 72,499 / 69,570
Total assets / 136,867 / 128,979
Liabilities
Debt
Government securities / 52,213 / 45,019
Loans / 4,905 / 3,972
Leases / 168 / 116
Deposits / 390 / 325
Overdrafts / 2 / 0
Other debt / 1,430 / 1,106
Total debt / 59,108 / 50,539
Provisions and payables
Employees / 95,817 / 97,346
Suppliers / 1,745 / 2,262
Personal benefits payable / 4,866 / 4,860
Subsidies payable / 505 / 344
Grants payable / 5,750 / 9,816
Other provisions and payables / 10,267 / 9,392
Total provisions and payables / 118,949 / 124,019
Total liabilities / 178,056 / 174,558
Net Assets (a) / -41,189 / -45,579
Equity
Accumulated results / -76,706 / -78,759
Reserves / 35,517 / 33,180
Capital / 0 / 0
Total equity / -41,189 / -45,579
(a) / Opening net assets / -42,207 / -45,133
Operating result after extraordinary items / 1,109 / -355
Asset revaluation reserve / 12 / -46
Other movements / -103 / -45
Closing net assets / -41,189 / -45,579
This table is prepared on a AAS 31 basis, unless otherwise indicated.
* As published in the Budget Strategy and Outlook 2004-05.

Australian Government General Government Sector –

Statement of Cash Flows

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
$m / $m / $m
Operating Activities
Cash received
Taxes / 9,364 / 40,079 / 179,561
Sales of goods and services / 324 / 1,202 / 4,536
Interest / 415 / 877 / 3,138
Dividends / 16 / 1,373 / 3,214
GST receipts / 70 / 629 / 2,653
Other / 330 / 906 / 2,504
Total operating cash received / 10,519 / 45,067 / 195,606
Cash used
Payments to employees / 1,530 / 4,566 / 18,868
Payments to suppliers / 1,098 / 4,687 / 18,752
Subsidies paid / 771 / 2,416 / 9,849
Personal benefits / 8,291 / 23,255 / 88,973
Grant payments / 2,351 / 8,911 / 38,164
Interest and other financing costs / 640 / 1,529 / 6,126
GST payments / 2 / 24 / 131
Other / 594 / 1,830 / 7,570
Total operating cash used / 15,277 / 47,218 / 188,433
Net Cash from Operating Activities / -4,758 / -2,151 / 7,173
Investing Activities
Net Cash received/(used)
Proceeds from asset sales programme / -2 / -2 / 0
Proceeds from sales of property, plant and equipment and intangibles / 136 / 207 / 810
Net loans, advances and HECS / 156 / 294 / -1,192
Purchase of property, plant and equipment and intangibles / -431 / -1,043 / -5,792
Other investing cash receipts/(payments) / -90 / -315 / -41
Net Cash from Investing Activities / -231 / -859 / -6,216
Financing Activities
Net Cash received/(used)
Net repayments of borrowings / 5,507 / 4,009 / 315
Other financing cash receipts/(payments) / 54 / -1,164 / -1,327
Net cash from Financing Activities / 5,561 / 2,845 / -1,012
Net increase / (decrease) in cash held / 572 / -165 / -54
This table is prepared on a AAS 31 basis, unless otherwise indicated.
* As published in the Budget Strategy and Outlook 2004-05.

Australian Government General Government Sector –

Statement of Financial Performance by Function

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
Note / $m / $m / $m
Revenues by Source
Taxation / 8,978 / 41,194 / 182,477
Non-taxation / 1,137 / 4,668 / 13,831
Total revenues / 10,115 / 45,863 / 196,308
Expenses by Purpose
General Public Services / 1,234 / 2,999 / 13,130
Defence / 1,043 / 3,025 / 14,254
Public Order and Safety / 223 / 638 / 2,733
Education / 4 / 170 / 595 / 14,690
Health / 2,822 / 8,898 / 34,988
Social Security and Welfare / 7,694 / 21,024 / 82,911
Housing and Community Amenities / 151 / 437 / 2,072
Recreation and Culture / 193 / 574 / 2,383
Fuel and Energy / 280 / 1,023 / 3,922
Agriculture, Forestry and Fishing / 128 / 402 / 2,402
Mining and Mineral Resources
(other than fuels); Manufacturing
and Construction / 68 / 335 / 1,832
Transport and Communication / 124 / 394 / 2,552
Other Economic Affairs / 427 / 1,213 / 4,574
Other Purposes
Public Debt Interest / 481 / 1,494 / 5,922
Nominal Superannuation Interest / 382 / 1,145 / 4,702
General Purpose Inter-
Government Transactions / 64 / 557 / 3,269
Natural Disaster Relief / 1 / 1 / 97
Contingency Reserve / 0 / 0 / 222
Asset Sales / 1 / 3 / 8
Total Expenses / 15,488 / 44,753 / 196,663
Operating Result / -5,372 / 1,109 / -355
This table is prepared on a AAS 31 basis, unless otherwise indicated.
* As published in the Budget Strategy and Outlook 2004-05.

Australian Government General Government Sector –

Reconciliation of aas31 Operating Result to Fiscal Balance

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
$m / $m / $m
AAS31 Operating result / -5,372 / 1,109 / -355
less assets recognised for the first time / 5 / 13 / 1
plus revaluations / writedowns from superannuation / 0 / 0 / 0
plus writedown of assets/bad and doubtful debts / 145 / 451 / 1,881
less mutually agreed writedowns / 11 / 118 / 434
plus net foreign exchange losses / 207 / 201 / 0
plus other economic revaluations (a) / -22 / -62 / 364
less profit (loss) on the sale of assets / 65 / 74 / 107
plus Defence weapons platform depreciation / 173 / 537 / 2,367
less Defence weapons platform investment / 245 / 567 / 2,869
GFS Net Operating Balance / -5,195 / 1,464 / 846
less purchase of property plant and equipment and intangibles / 406 / 998 / 5,723
less net assets acquired under finance leases / 0 / 0 / 7
less other non-financial assets / 35 / 44 / 71
less increase in inventories / -52 / -110 / -42
plus proceeds from sales of property, plant and equipment / 136 / 207 / 810
plus Defence weapons platform investment / 245 / 567 / 2,869
plus depreciation and amortisation excl weapons / 159 / 472 / 1,933
Fiscal Balance (GFS Net Lending) / -5,044 / 1,778 / 698
* Data in this table are consistent with that published in the Budget Strategy and Outlook 2004-05.
(a) Net repurchase premia (accruals basis), net losses/gains on swap transactions, cost of asset sales, International Development Association/Asian Development Fund payments and public non-financial corporations superannuation revenue are included in this item.

Australian Government General Government Sector –

Derivation of Underlying and HeadlineBalance

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
$m / $m / $m
Net cash from operating activities / -4,758 / -2,151 / 7,173
Plus: Payments classified as GFS adjustments (a) / -3 / 92 / 208
Plus: Net cash from investments in non-financial assets / 0
Proceeds from sales of property, plant and equipment and intangibles / 136 / 207 / 810
Less: Purchase of property, plant and equipment and intangibles / 431 / 1,043 / 5,792
Less: Finance leases and similar arrangements / 0 / 0 / 7
Underlying Cash Balance / -5,056 / -2,895 / 2,391
Plus: Net Advances
Proceeds from asset sales program / -2 / -2 / 0
Net advance receipts/(payments) (b) / 156 / 225 / -1,374
Equals Headline Cash Balance / -4,902 / -2,672 / 1,017
* Data in this table are consistent with that published in the Budget Strategy and Outlook 2004-05.
(a) Includes public non-financial corporations principal repayments, cost of asset sales, swap transactions, International Development Association/Asian Development Fund and public debt interest adjustments.
(b) Includes transactions classified as net advances for GFS purposes such as Higher Education Contribution Scheme loans and loans to other levels of Government (State, Local and Multi-jurisdictional) for policy purposes.

NOTES:

The accounting policies in this part are generally consistent with the requirements of AAS. While the scope for financial reporting recommended in AAS 31 is the whole of government (that is, the Australian Government public sector), in accordance with the Charter of Budget Honesty Act 1998, this presentation covers the general government sector only. This publication does not include full note disclosures.

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.

All taxation items in these notes are reported on an AAS31 basis, unless otherwise indicated.

Note 1: Income Tax

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
$m / $m / $m
INDIVIDUALS AND OTHER WITHHOLDING TAX
Gross income tax withholding (a) / 7,895 / 24,495 / 95,150
Gross other individuals / 790 / 4,984 / 20,390
Less refunds / 2,083 / 6,556 / 12,850
Total individuals and other withholding tax / 6,602 / 22,923 / 102,690
OTHER SOURCES
Companies (b) / - 342 / 8,136 / 39,400
Superannuation funds (c) / 79 / 1,718 / 6,910
Petroleum Resource Rent Tax / 72 / 113 / 1,100
Total income tax from other sources (b) / - 190 / 9,967 / 47,410
-
Total income tax / 6,412 / 32,889 / 150,100
-
Fringe Benefits tax (b) / - 39 / 647 / 3,190
* As published in the Budget Strategy and Outlook 2004-05.
(a) Previously reported as Pay As You Go (Withholding) and other withholding. Other withholding was previously reported
under other sources of income tax, and includes amounts withheld for failure to quote a Tax File Number or an
Australian Business Number, interest, dividends and royalty payments to non-residents, and payments to aboriginal groups
for the use of land for mineral exploration and mining.
(b) Negative collections indicate refunds exceed collections.
(c) Includes superannuation contributions surcharge.

Note 2: Indirect Tax

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
$m / $m / $m
Excise duty / 1,910 / 5,518 / 21,220
Customs duty / 498 / 1,509 / 5,335
Other indirect tax / 65 / 262 / 990
Total indirect tax revenue / 2,474 / 7,289 / 27,545
* As published in the Budget Strategy and Outlook 2004-05.

Note 3: Goods and Services Tax

In regard to GST revenue, AAS31 and other relevant accounting standards would suggest the gross amount of GST be included in the Australian Government’s Financial Statements. However, the clear policy intent of the Intergovernmental Agreement on the Reform of Australian Government-State Financial Relations is that the GST is a State tax collected by the Australian Government in an agency capacity. Therefore, accrued GST revenues and associated payments to the States and Territories are not disclosed in these statements.

ACTUAL / ACTUAL / ESTIMATE
2004-2005 / 2004-2005 / 2004-2005
September / Year to Date September / FULL YEAR*
$m / $m / $m
GST Revenue (a) / 1,716 / 8,607 / 35,190
(collected on behalf of the States)
* As published in the Budget Strategy and Outlook 2004-05.
(a) GST revenue is presented in this note on an accrual basis. This differs from GST cash receipts, on
which payments to the States and Territories are based.

Note 4: Adjustment for education grant expenditure

In regard to education grant expenditure, adherence to AAS31 and other relevant accounting standards results in few education expenses being reported until the signing of the Ministerial determination, which normally occurs between December and February each year. This produces a bunching of expenses such that the full year's expense is recognised at that time and remains relatively constant until June. The table below provides details of the cash paid by DEST and ANTA and attributable to the Education function for the year to date.

ACTUAL
2004-2005
Year to Date September
$m
Opening grants payable for DEST and ANTA / 5,870
less closing grants payable for DEST and ANTA / 3,047
plus grant expenses for DEST and ANTA / 220
Cash payments for grants attributable to the Education function. / 3,044

NOTE:

Style Conventions

(1)Figures in tables and generally in the text have been rounded. Discrepancies in tables between totals and sums of components are due to rounding.

International Monetary Fund (IMF) Special Data Dissemination Standards (SDDS)

(1)In accordance with the IMF's SDDS, quarter ahead notice of the date of release of the data on central government operations, which is contained in the Australian Government Financial Statements, is given on the IMF's Data Dissemination Bulletin Board at http//dsbb.imf.org.

(2)Monthly and quarterly data on debt guaranteed by the Australian Government (central) government that meet the coverage and timeliness requirements of the SDDS are published on the AOFM website at GovernmentGovernmentSecurities.htm. In accordance with the IMF SDDS, quarter ahead notice of the approximate date of release of the data on debt guaranteed by the Australian Government (central) government, is given on the IMF's Data Dissemination Bulletin Board at

2 November 2004Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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