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Australian Government General Government Sector Monthly Financial Statements May 2016



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SENATOR THE HON MATHIAS CORMANN Minister for Finance Deputy Leader of the Government in the Senate

MEDIA RELEASE

Friday, 24 June 2016

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR MONTHLY FINANCIAL STATEMENTS MAY 2016

KEY POINTS

• The underlying cash balance for the 2015-16 financial year to 31 May 2016 was a deficit of $34,860 million.

• The fiscal balance for the 2015-16 financial year to 31 May 2016 was a deficit of $30,611 million.

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.

AGGREGATES

ACTUAL 2015-2016 May $m

ACTUAL 2015-2016 YTD May $m

Revised

Monthly Profile^ 2015-2016 YTD May $m

Revised Budget ESTIMATE* 2015-2016 Full Year

$m

Revenue 40,456 360,209 358,892 396,396

Expenses 35,909 388,061 390,375 431,470

Net operating balance 4,547 -27,852 -31,484 -35,074

Net capital investment 1,342 2,759 3,291 4,355

Fiscal balance 3,204 -30,611 -34,775 -39,429

Receipts(a) 38,905 349,860 349,794 388,027

less Payments(b) 34,558 381,905 384,311 424,961

less Net Future Fund earnings 224 2,814 2,710 3,012

Underlying cash balance(c) 4,124 -34,860 -37,227 -39,946

Headline cash balance 3,093 -43,530 -47,321 -51,487

Total assets 488,067 465,421

Total liabilities 831,956 730,448

Net w orth(d) -343,889 -265,027

Net debt(e) 284,657 285,684

*As published in the 2016-17 Budget. ^Based on the previous profile, adjusted for significant changes in the 2016-17 Budget. (a) Cash receipts for operating activities and sales of non-financial assets. (b) Cash payments for operating activities, purchases of non-financial assets and net acquisition of assets under finance leases. (c) Excludes net Future Fund earnings. Consistent with Budget documents, the net adjustment for the Future Fund is shown separate (d) Net worth is calculated as total assets minus total liabilities. (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.

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FISCAL OUTCOMES

Underlying Cash Balance The underlying cash balance for the year to 31 May 2016 was a deficit of $34,860 million, compared to the Revised Budget profile deficit of $37,227 million. The difference of $2,368 million primarily relates to lower than expected cash payments.

Fiscal Balance The fiscal balance for the year to 31 May 2016 was a deficit of $30,611 million, compared to the Revised Budget profile deficit of $34,775 million. The difference of $4,164 million primarily relates to lower than expected expenses and higher than expected revenue.

• Revenues Total revenue was $1,317 million higher than the Revised Budget profile, primarily due to higher than expected taxation revenue.

• Expenses Total expenses were $2,315 million lower than the Revised Budget profile, primarily due to lower than expected grants, supply of goods and services, personal benefits, wages and salaries, partially offset by higher other operating expenses.

Assets and Liabilities As at 31 May 2016: • Net worth is negative $343,889 million; • Net debt is $284,657 million; and • Net financial liabilities are $514,964 million.

Senator the Hon Mathias Cormann

Minister for Finance

Media Contact: Karen Wu (02) 6277 7400

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Australian Government general government sector operating statement

Note

ACTUAL 2015-2016 May $m

ACTUAL 2015-2016 YTD May $m

Revised Monthly Profile^ 2015-2016 YTD May

$m

Revised Budget ESTIMATE* 2015-2016 Full Year

$m

Revenue

Taxation revenue 1, 2 38,615 340,866 339,702 371,923

Sales of goods and services 688 7,142 6,979 7,697

Interest income 271 3,120 3,137 3,506

Dividend income 329 2,638 2,238 5,564

Other 551 6,443 6,836 7,706

Total revenue 40,456 360,209 358,892 396,396

Expenses

Gross operating expenses

Wages and salaries(a) 1,695 17,118 17,480 19,767

Superannuation 529 5,659 5,575 7,052

Depreciation and amortisation 499 6,429 6,464 7,165

Supply of goods and services 7,371 76,085 76,792 81,414

Other operating expenses(a) 671 5,516 5,045 5,483

Total gross operating expenses 10,764 110,808 111,357 120,881

Superannuation interest expense 769 8,463 8,430 9,167

Interest expenses 1,455 15,282 15,300 16,774

Current transfers

Current grants 10,450 112,197 114,347 128,393

Subsidy expenses 1,054 11,547 11,471 12,763

Personal benefits 10,763 120,897 121,348 133,416

Total current transfers 22,267 244,641 247,166 274,572

Capital transfers

Mutually agreed w rite-dow ns 37 1,365 1,497 1,722

Other capital grants 616 7,501 6,625 8,354

Total capital transfers 654 8,866 8,122 10,076

Total expenses 3 35,909 388,061 390,375 431,470

Net operating balance 4,547 -27,852 -31,484 -35,074

Other economic flow s

- included in operating result(b) Net w rite-dow ns of assets (including bad and doubtful debts) 2,300 -9,568 -5,683 -7,106

Assets recognised for the first time -24 289 323 296

Liabilities recognised for the first time 0 0 0 0

Actuarial revaluations 0 0 0 0

Net foreign exchange gains -1,136 -1,083 -40 -9

Net sw ap interest received 57 -200 -257 -437

Market valuation of debt -5,291 -10,961 -4,992 -4,673

Other gains/(losses) 695 5,804 5,601 713

Total other economic flow s

- included in operating result -3,399 -15,719 -5,048 -11,215

Operating result 1,147 -43,570 -36,532 -46,289

Non-ow ner movements in equity(b)

Revaluation of equity investments(c) 86 106 -599 -3,026

Actuarial revaluations 0 0 0 1,032

Other economic revaluations(d) 2,269 1,924 3,181 371

Total other economic flow s - included in equity 2,354 2,030 2,582 -1,623

Comprehensive result - Total change in net w orth 3,502 -41,540 -34,200 -47,912

Net operating balance 4,547 -27,852 -31,484 -35,074

Net acquisition of non-financial assets

Purchases of non-financial assets 1,733 9,201 9,367 11,559

less Sales of non-financial assets 23 389 366 404

less Depreciation 499 6,429 6,164 7,165

plus Change in inventories 141 226 401 310

plus Other movements in non-financial assets -10 149 53 56

Total net acquisition of non-financial assets 1,342 2,759 3,291 4,355

Fiscal balance (Net lending/borrow ing)(e) 3,204 -30,611 -34,775 -39,429

*As published in the 2016-17 Budget. ^Based on the previous profile, adjusted for significant changes in the 2016-17 Budget. (a) Consistent with Australian Bureau of Statistics' (ABS) Government Finance Statistics (GFS) classification, other employee related expenses are reported und operating expenses. Total employee expenses equal wages and salaries plus other operating expenses. (b) The presentation of other economic flows has changed to align more closely with Australian Accounting Standard AASB 1049. (c) Reflects changes in the market valuation of investments and any revaluations at the point of disposal or sale. (d) Largely reflects other revaluation of assets and liabilities. (e) The term fiscal balance is not used by the ABS.

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Australian Government general government sector balance sheet

ACTUAL as at

31 May 2016 $m

Revised Budget ESTIMATE* as at 30 June 2016

$m

Assets Financial assets Cash and deposits 3,562 3,512

Advances paid 50,515 52,782

Investments, loans and placements 172,294 153,233

Other receivables 50,087 48,492

Equity investments

Investments in other public sector entities 48,746 44,798

Equity accounted investments 302 344

Investments - shares 40,231 39,394

Total financial assets 365,738 342,555

Non-financial assets Land 10,361 9,729

Buildings 25,357 25,992

Plant, equipment and infrastructure 59,468 59,692

Inventories 8,334 8,195

Intangibles 6,758 6,881

Investment property 205 200

Biological assets 35 44

Heritage and cultural assets 11,366 11,697

Assets held for sale 98 174

Other non-financial assets 347 262

Total non-financial assets 122,329 122,866

Total assets 488,067 465,421

Liabilities

Interest bearing liabilities Deposits held 216 218

Government securities 492,858 476,999

Loans 16,229 16,425

Other borrow ing 1,727 1,569

Total interest bearing liabilities 511,029 495,211

Provisions and payables Superannuation liability(a) 255,130 169,308

Other employee liabilities 17,475 17,004

Suppliers payable 5,319 5,868

Personal benefits provisions and payable 12,720 14,446

Subsidies provisions and payable 5,188 4,908

Grants provisions and payable 10,231 10,466

Other provisions and payables 14,863 13,237

Total provisions and payables 320,927 235,237

Total liabilities 831,956 730,448

Net w orth(b) -343,889 -265,027

Net financial worth(c) -466,218 -387,893

Net financial liabilities(d) 514,964 432,691

Net debt(e) 284,657 285,684

*As published in the 2016-17 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 govern bond rate were used. Consistent with Australian Accounting Standards, the long-term government bond rate as at 30 June is use 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 dep advances paid, and investments, loans and placements.

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Australian Government general government sector cash flow statement

ACTUAL 2015-2016 May $m

ACTUAL 2015-2016 YTD May $m

Revised

Monthly Profile^ 2015-2016 YTD May $m

Revised Budget ESTIMATE* 2015-2016

Full Year $m

Cash receipts from operating activities Taxes received 36,195 329,600 328,614 364,507

Receipts from sales of goods and services 908 6,605 6,624 7,686

Interest receipts 246 2,382 2,488 2,842

Dividends and income tax equivalents 1,157 5,161 5,009 5,332

Other receipts 345 5,780 6,626 7,321

Total operating receipts 38,851 349,528 349,360 387,688

Cash payments for operating activities

Payments for employees -2,153 -24,330 -25,168 -27,893

Payments for goods and services -6,832 -74,911 -76,648 -80,834

Grants and subsidies paid -12,474 -131,687 -132,902 -149,656

Interest paid -888 -14,084 -13,958 -14,822

Personal benefit payments -10,696 -123,117 -122,229 -134,887

Other payments -433 -5,205 -4,837 -5,308

Total operating payments -33,476 -373,335 -375,743 -413,400

Net cash flow s from operating activities 5,375 -23,807 -26,382 -25,712

Cash flow s from investments in non-financial assets

Sales of non-financial assets 54 332 434 339

Purchases of non-financial assets -1,018 -8,447 -8,567 -11,559

Net cash flow s from investments in non-financial assets -963 -8,114 -8,133 -11,221

Net cash flow s from investments in financial assets for policy purposes -1,254 -11,485 -10,094 -14,553

Cash flow s from investments in financial assets for liquidity purposes Increase in investments -18,621 -27,749 -23,078 -9,396

Net cash flow s from investments in financial assets for liquidity purposes -18,621 -27,749 -23,078 -9,396

Cash flow s from financing activities

Borrow ing (net) 15,310 74,146 70,722 63,753

Other financing (net) -176 -2,584 -2,572 -2,516

Net cash flow s from financing activities 15,134 71,562 68,150 61,238

Net increase/(decrease) in cash held -330 407 463 356

Net cash flow s from operating activities and investments in non-financial assets (Surplus(+)/deficit(-)) 4,411 -31,922 -34,516 -36,933

Finance leases and similar arrangements(b) -64 -123 -1 -2

GFS cash surplus(+)/deficit(-) 4,347 -32,045 -34,517 -36,934

less Net Future Fund earnings 224 2,814 2,710 3,012

Equals underlying cash balance(c) 4,124 -34,860 -37,227 -39,946

plus Net cash flow s from investments in financial assets for policy purposes -1,254 -11,485 -12,804 -14,553

plus Net Future Fund earnings 224 2,814 2,710 3,012

Equals headline cash balance 3,093 -43,530 -47,321 -51,487

*As published in the 2016-17 Budget. ^Based on the previous profile, adjusted for significant changes in the 2016-17 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 fina increases the underlying cash. (c) The term underlying cash balance is not used by the Australian Bureau of Statistics.

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Note 1: Income Tax

Note 2: Indirect Tax

ACTUAL 2015-2016 May $m

ACTUAL 2015-2016 YTD May $m

Revised Monthly Profile^ 2015-2016 YTD May

$m

Revised Budget ESTIMATE* 2015-2016

Full Year $m

Individuals and other w ithholding taxes Gross income tax w ithholding 15,053 160,343 160,362 175,510

Gross other individuals 7,027 41,116 40,695 44,850

less Refunds 1,637 27,075 26,920 27,800

Total individuals and other w ithholding taxation 20,442 174,384 174,137 192,560

Fringe benefits tax 279 4,440 4,589 4,590

Company tax 7,802 59,185 58,797 65,000

Superannuation funds 556 6,613 6,483 6,710

Resource rent taxes 0 711 702 840

Total income taxation revenue 29,080 245,333 244,708 269,700

*As published in the 2016-17 Budget. ^Based on the previous profile, adjusted for significant changes in the 2016-17 Budget.

ACTUAL 2015-2016 May $m

ACTUAL 2015-2016 YTD May $m

Revised Monthly Profile^ 2015-2016

YTD May $m

Revised Budget ESTIMATE* 2015-2016 Full Year

$m

Goods and services tax 5,533 56,722 56,879 60,040

Wine equalisation tax 76 804 803 880

Luxury car tax 60 560 542 590

Excise duty 2,006 19,870 19,700 21,423

Customs duty 1,393 12,467 12,046 13,430

Other indirect tax 468 5,110 5,025 5,860

Total indirect taxation revenue 9,536 95,533 94,995 102,223

*As published in the 2016-17 Budget. ^Based on the previous profile, adjusted for significant changes in the 2016-17 Budget.

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Note 3: Total expenses by function

ACTUAL 2015-2016 May $m

ACTUAL 2015-2016 YTD May $m

Revised Budget ESTIMATE* 2015-2016 Full Year

$m

Expenses by function General public services 1,913 18,965 23,967

Defence 2,386 24,756 25,986

Public order and safety 412 4,331 4,958

Education 1,864 29,801 32,515

Health 6,701 62,944 69,172

Social security and w elfare 12,259 139,377 152,838

Housing and community amenities 498 4,001 4,865

Recreation and culture 274 2,992 3,512

Fuel and energy 552 6,037 6,528

Agriculture, Forestry and Fishing 174 1,771 2,768

Mining, manufacturing and construction 315 3,112 3,650

Transport and communication(a) 804 5,056 8,647

Other economic affairs 505 8,076 9,626

Other purposes Public debt interest 1,282 14,101 15,376

Nominal superannuation interest 769 8,463 9,167

General purpose inter-government transactions 5,199 54,277 59,380

Natural disaster relief 0 0 49

Contingency reserve 0 0 -1,536

Total expenses 35,909 388,061 431,470

*As published in the 2016-17 Budget.

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NOTES:

Australian Accounting Standard 1049 The Australian Government monthly financial statements have been prepared on a basis consistent with the Budget as required under section 47 of the Public Governance, Performance and Accountability Act 2013. The statements are prepared in accordance with the Australian Accounting Standards Board 1049 - Whole of Government and General Government Sector Financial Reporting (AASB 1049), which require treatment 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.

Taxation revenue 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 therefore estimates, in accordance with the best judgement of the Commissioner of Taxation, and subject to revision. The taxation revenue items not affected are: petroleum resource rent tax, excise duty, customs duty, other taxes and individuals refunds.

Style conventions 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 Special Data Dissemination Standards 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 (SDDS). Under these standards the timeframe for releasing the monthly financial statements is by the end of the following month. Australia applies a special flexibility option which allows it to publish late the last and first month of a financial year.

In accordance with the IMF SDDS, 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 Advance Release Calendar http://dsbb.imf.org. 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 Australian Office of Financial Management website at http://aofm.gov.au/cgs-quarterly/quarterley-data-march-2016/.

Electronic access to monthly financial statements

The Australian Government general government sector monthly financial statements and the historical series are available in electronic format at:

http://data.gov.au/dataset/australian-government-general-government-sector-monthly-financial-statements-tables-and-data.