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Australian government general government sector monthly financial statements February 2018



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

Friday, 23 March 2018

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR MONTHLY FINANCIAL STATEMENTS FEBRUARY 2018

KEY POINTS • The underlying cash balance for the 2017-18 financial year to 28 February 2018 was a deficit of $19,752 million.

• The fiscal balance for the 2017-18 financial year to 28 February 2018 was a deficit of $15,554 million.

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

AGGREGATES

ACTUAL 2017-2018 February $m

ACTUAL 2017-2018 YTD February $m

MYEFO Profile 2017-2018 YTD February $m

MYEFO

ESTIMATE* 2017-2018 FULL YEAR $m

Revenue 44,765 289,218 282,723 448,702

Expenses 35,373 304,521 307,821 466,937

Net operating balance 9,392 -15,303 -25,099 -18,235

Net capital investment -33 251 -369 193

Fiscal balance 9,425 -15,554 -24,730 -18,428

Receipts(a) 40,839 280,533 275,026 437,075

less Payments(b) 32,237 297,342 300,335 457,606

less Net Future Fund earnings 275 2,943 2,459 3,076

Underlying cash balance(c) 8,327 -19,752 -27,768 -23,608

Headline cash balance 8,146 -25,082 -34,855 -39,573

Total assets 528,087 537,962

Total liabilities 927,839 848,622

Net worth(d) -399,752 -310,660

Net debt(e) 344,876 343,778

*As published in the 2017-18 MYEFO. (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 separately. (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 financial year to 28 February 2018 was a deficit of $19,752 million, which is $8,016 million lower than the 2017-18 MYEFO profile deficit of $27,768 million.

• Receipts Total receipts were $5,507 million higher than the 2017-18 MYEFO profile.

• Payments Total payments were $2,993 million lower than the 2017-18 MYEFO profile.

Net Operating Balance The net operating balance for the year to 28 February 2018 was a deficit of $15,303 million, which is $9,796 million lower than the 2017-18 MYEFO profile deficit of $25,099 million. The difference primarily results from higher than expected revenue and lower expenses.

Fiscal Balance The fiscal balance for the year to 28 February 2018 was a deficit of $15,554 million, which is $9,175 million lower than the 2017-18 MYEFO profile deficit of $24,730 million. As with the net operating balance, the difference primarily results from higher than expected revenue and lower expenses.

Assets and Liabilities As at 28 February 2018: • net worth is negative $399,752 million; • net debt is $344,876 million; and • net financial liabilities are $592,413 million.

Senator the Hon Mathias Cormann Rosemary Huxtable PSM

Minister for Finance Secretary

Department of Finance

Media Contacts Karen Wu 0428 350 139

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Australian Government general government sector operating statement

Note

ACTUAL 2017-2018 February $m

ACTUAL 2017-2018 YTD February $m

MYEFO Profile 2017-2018 YTD February $m

MYEFO

ESTIMATE* 2017-2018 FULL YEAR $m

Revenue

Taxation revenue 1,2 42,803 271,796 265,828 421,508

Sales of goods and services 787 6,328 6,572 10,491

Interest income 135 2,280 2,176 3,580

Dividend income 375 2,737 2,083 3,112

Other 664 6,077 6,063 10,012

Total revenue 44,765 289,218 282,723 448,702

Expenses

Gross operating expenses

Wages and salaries(a) 1,543 12,630 13,088 20,083

Superannuation 582 4,975 4,867 7,748

Depreciation and amortisation 753 5,692 6,351 9,507

Supply of goods and services 8,174 64,983 66,238 104,308

Other operating expenses(a) 545 4,248 3,871 5,832

Total gross operating expenses 11,597 92,527 94,415 147,478

Superannuation interest expense 827 6,617 6,334 9,240

Interest expenses 1,364 11,701 11,725 18,027

Current transfers

Current grants 10,162 94,185 95,144 140,142

Subsidy expenses 1,008 7,791 7,780 11,869

Personal benefits 9,512 85,943 86,419 128,483

Total current transfers 20,682 187,920 189,343 280,495

Capital transfers

Mutually agreed write-downs 102 1,585 1,530 1,913

Other capital grants 801 4,170 4,473 9,784

Total capital transfers 903 5,755 6,003 11,697

Total expenses 3 35,373 304,521 307,821 466,937

Net operating balance 9,392 -15,303 -25,099 -18,235

Other economic flows

- included in operating result Net write-downs of assets (including bad and doubtful debts) -971 -4,816 -5,047 -7,852

Assets recognised for the first time 17 138 136 204

Actuarial revaluations -27 0 5 8

Net foreign exchange gains -1,216 186 0 -64

Net swap interest received 65 247 204 250

Market valuation of debt -155 5,904 -2,071 -1,303

Other gains/(losses) 1,057 4,032 2,480 7,443

Total other economic flows - included in operating result

-1,230 5,691 -4,292 -1,314

Operating Result (b) 8,162 -9,613 -29,391 -19,549

Non-owner movements in equity Revaluation of equity investments(c) 0 -125 -2,047 -6,231

Actuarial revaluations 0 0 38 -2,274

Other economic revaluations(d) -4 809 14 -302

Total other economic flows - included in equity -4 684 -1,995 -8,807

Comprehensive result - Total change in net worth 8,158 -8,929 -31,386 -28,355

Net operating balance 9,392 -15,303 -25,099 -18,235

Net acquisition of non-financial assets Purchases of non-financial assets 674 7,852 7,463 12,993

less Sales of non-financial assets 5 1,941 1,640 3,699

less Depreciation 753 5,692 6,351 9,507

plus Change in inventories 50 -7 174 405

plus Other movements in non-financial assets 1 39 -15 1

Total net acquisition of non-financial assets -33 251 -369 193

Fiscal balance (Net lending/borrowing)(e) 9,425 -15,554 -24,730 -18,428

*As published in the 2017-18 MYEFO. (a) Consistent with Australian Bureau of Statistics' (ABS) Government Finance Statistics (GFS) classification, other employee related expenses are reported under other operating expenses. Total employee expenses equal wages and salaries plus other operating expenses. (b) Operating result under Australian Accounting Standards. (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

28 February 2018 $m

MYEFO ESTIMATE* as at 30 June 2018 $m

Assets

Financial assets

Cash and deposits 7,680 4,400

Advances paid 51,549 63,049

Investments, loans and placements 169,826 186,430

Other receivables 55,159 53,945

Equity investments

Investments in other public sector entities 52,164 46,725

Equity accounted investments 84 200

Investments - shares 51,130 42,546

Total financial assets 387,590 397,295

Non-financial assets

Land 11,062 10,882

Buildings 25,444 26,280

Plant, equipment and infrastructure 75,836 74,670

Inventories 8,397 8,538

Intangibles 7,585 8,381

Investment property 159 113

Biological assets 48 54

Heritage and cultural assets 11,671 11,601

Assets held for sale 196 86

Other non-financial assets 98 61

Total non-financial assets 140,497 140,666

Total assets 528,087 537,962

Liabilities

Interest bearing liabilities

Deposits held 214 218

Government securities 556,041 580,340

Loans 16,003 15,518

Other borrowing 1,672 1,582

Total interest bearing liabilities 573,930 597,658

Provisions and payables

Superannuation liability(a) 285,328 181,257

Other employee liabilities 18,647 18,600

Suppliers payables 6,357 8,015

Personal benefits payables 2,984 2,993

Subsidies payables 393 554

Grants payables 2,920 3,350

Other payables 3,143 2,183

Provisions 34,138 34,012

Total provisions and payables 353,909 250,964

Total liabilities 927,839 848,622

Net worth(b) -399,752 -310,660

Net financial worth(c) -540,249 -451,326

Net financial liabilities(d) 592,413 498,052

Net debt(e) 344,876 343,778

*As published in the 2017-18 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, that best matches each individual scheme's liability duration, 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.

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Australian Government general government sector cash flow statement(a)

ACTUAL 2017-2018 February $m

ACTUAL 2017-2018 YTD February $m

MYEFO Profile 2017-2018 YTD February $m

MYEFO

ESTIMATE* 2017-2018 FULL YEAR $m

Cash receipts from operating activities

Taxes received 39,866 261,040 256,246 409,350

Receipts from sales of goods and services 987 6,746 7,008 10,609

Interest receipts 130 2,234 1,979 3,249

Dividends and income tax equivalents 276 3,791 3,259 4,174

Other receipts 329 5,803 5,826 8,305

Total operating receipts 41,588 279,614 274,318 435,686

Cash payments for operating activities

Payments for employees -2,579 -18,056 -18,531 -28,917

Payments for goods and services -7,125 -64,871 -65,184 -101,030

Grants and subsidies paid -11,848 -106,967 -108,143 -162,144

Interest paid -332 -9,277 -9,305 -16,623

Personal benefit payments -9,556 -87,098 -87,929 -130,231

Other payments -26 -4,021 -3,693 -5,498

Total operating payments -31,466 -290,290 -292,785 -444,443

Net cash flows from operating activities 10,122 -10,676 -18,467 -8,757

Cash flows from investments in non-financial assets

Sales of non-financial assets^ -749 919 708 1,389

Purchases of non-financial assets -680 -6,961 -7,550 -13,163

Net cash flows from investments in non-financial assets -1,429 -6,042 -6,842 -11,774

Net cash flows from investments in financial assets for policy purposes -456 -8,273 -9,546 -19,042

Cash flows from investments in financial assets for liquidity purposes

Increase in investments -9,941 15,691 26,322 8,165

Net cash flows from investments in financial assets for liquidity purposes -9,941 15,691 26,322 8,165

Cash flows from financing activities

Borrowing (net) 2,370 14,079 15,001 33,746

Other financing (net) -1,632 -1,632 -1,352 -3,076

Total cash receipts from financing activities 738 12,447 13,649 33,746

Net cash flows from financing activities 738 12,447 13,649 33,746

Net increase/(decrease) in cash held -966 3,147 5,116 2,337

GFS cash surplus(+)/deficit(-)(b)(c) 8,693 -16,718 -25,309 -20,531

less Finance leases and similar arrangements(d) 91 91 0 0

less Net Future Fund earnings 275 2,943 2,459 3,076

Equals underlying cash balance(e) 8,327 -19,752 -27,768 -23,608

plus Net cash flows from investments in financial assets for policy purposes -456 -8,273 -9,546 -19,042

plus Net Future Fund earnings 275 2,943 2,459 3,076

Equals headline cash balance 8,146 -25,082 -34,855 -39,573

*As published in the 2017-18 MYEFO. ^ This movement in February relates to an adjustment to year-to-date sales of non-financial assets from that previously reported in January 2018. (a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow. (b) Due to the implementation of the 2015 ABS GFS Manual in the 2017-18 Budget, finance leases are no longer deducted in the derivation of the GFS cash surplus/deficit. (c) GFS cash surplus/deficit equals net cash flows from operating activities and investments in non-financial assets. (d) The acquisition of assets under finance leases worsens the underlying cash balance. The disposal of assets previously held under finance leases improves the underlying cash balance. (e) 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

Note 3: Total expenses by function

ACTUAL 2017-2018 February $m

ACTUAL 2017-2018 YTD February $m

MYEFO Profile 2017-2018 YTD February $m

MYEFO

ESTIMATE* 2017-2018 FULL YEAR $m

Individuals and other w ithholding taxes

Gross income tax w ithholding 17,624 127,321 126,368 190,600

Gross other individuals 4,339 25,258 25,126 47,800

less Refunds 1,007 24,112 24,272 29,200

Total individuals and other w ithholding taxation 20,957 128,468 127,222 209,200

Fringe benefits tax 200 2,908 2,842 4,080

Company tax 7,202 54,243 51,219 83,800

Superannuation fund taxes 755 8,535 8,269 10,570

Petroleum resource rent tax 1 840 809 1,030

Total income taxation revenue 29,115 194,994 190,362 308,680

*As published in the 2017-18 MYEFO.

ACTUAL 2017-2018 February $m

ACTUAL 2017-2018 YTD February $m

MYEFO Profile 2017-2018 YTD February $m

MYEFO

ESTIMATE* 2017-2018 FULL YEAR $m

Goods and services tax 8,849 45,249 44,779 65,560

Wine equalisation tax 94 612 617 920

Luxury car tax 58 498 453 680

Excise duty 1,740 15,184 15,044 22,350

Customs duty 1,565 9,768 9,252 14,800

Other indirect tax 1,382 5,491 5,321 8,518

Total indirect taxation revenue 13,688 76,802 75,466 112,828

*As published in the 2017-18 MYEFO.

ACTUAL 2017-2018 February $m

ACTUAL 2017-2018 YTD February $m

MYEFO

ESTIMATE* 2017-2018 FULL YEAR $m

Expenses by function General public services 1,775 15,680 24,371

Defence 2,392 18,537 31,022

Public order and safety 294 3,388 5,249

Education 1,820 25,696 33,793

Health 6,134 49,779 75,942

Social security and w elfare 12,011 106,763 163,953

Housing and community amenities 346 2,938 5,383

Recreation and culture 204 2,001 3,731

Fuel and energy 601 4,605 7,393

Agriculture, forestry and fishing 138 1,478 3,027

Mining, manufacturing and construction 254 2,260 3,557

Transport and communication 913 4,209 9,389

Other economic affairs 788 6,485 10,106

Other purposes Public debt interest 1,306 11,192 16,959

Nominal superannuation interest 827 6,617 9,240

General purpose inter-government transactions 5,570 42,891 64,347

Natural disaster relief 0 0 12

Contingency reserve 0 0 -538

Total expenses 35,373 304,521 466,937

*As published in the 2017-18 MYEFO.

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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/.

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.