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Commonwealth Government monthly financial statements for the months of September and October 2002



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6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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6 December 2002 45/2002

COMMONWEALTH GOVERNMENT MONTHLY FINANCIAL STATEMENTS

FOR THE MONTHS OF SEPTEMBER AND OCTOBER 2002

KEY POINTS • The underlying cash balance for the year to date 31 October 2002 was a surplus of $809 million.

• The fiscal balance for the year to date 31 October 2002 was a surplus of $2,771 million.

• The net operating result for the year to date 31 October 2002 was a surplus of $2,800 million.

FISCAL AND FINANCIAL OUTCOMES Care needs to be taken when comparing monthly or cumulative data across years, and to full year estimates, since factors such as the introduction of The New Tax System and the accrual framework, and the timing of payments and policy decisions can have a large impact on fiscal aggregates from one year to the next and on year to date outcomes.

MEDIA RELEASE SENATOR NICK MINCHIN Minister for Finance and Administration

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

AGGREGATES

September October CUM ULATIVE YTD October FULL YEAR*

$m $m $m $m

Under lying Cash Balance -4,295 4,609 809 2,141

Fiscal Balance -4,682 5,531 2,771 -548

Headline Cash Balance -4,129 4,783 1,027 1,737

R evenue (a) 8,533 20,342 59,785 173,135

Expenses (a) 13,203 14,239 56,984 173,422

Net Oper ating Resul t -4,670 6,102 2,800 -287

Assets 131,756 131,832 131,832 122,189

Liabilities 177,701 171,715 171,715 171,098

Net Assets (a) -45,945 -39,883 -39,883 -48,909

* As published in the Mid-Year Economic and Fiscal Outlook 2002-03.

(a) R evenue, expenses and net assets are on a AAS31 basis.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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FISCAL OUTCOMES UNDERLYING CASH BALANCE

The main components of the underlying cash balance are cash from operations and movements in the net investment in non-financial assets.

The underlying cash balance for the year to date 31 October 2002 was a surplus of $809 million.

The underlying cash balance as at the end of October 2002 is higher than a pro-rata of the revised Budget estimate (which equals a surplus of $714 million). The main factors contributing to the difference are:

• dividend receipts exceeding the pro-rata profile due to the receipt of the 2001-02 dividends from the Reserve Bank of Australia, Australia Post and Telstra;

• higher petroleum royalty receipts as a result of an increase in oil prices;

• lower grant payments in relation to:

− Home and Community Care, due to the timing of claims by States and Territories;

− the timing of quarterly payments to States for Financial Assistance Grants; and

− a lower level of expenses on road infrastructure projects for the National Highway and Roads of National Importance Programme. Payments for this programme are made on the achievement of project milestones as outlined in capital plans. These plans are yet to be finalised.

Partially offset by:

• higher subsidies payments due to the prepayment of Residential Care subsidies;

• higher personal benefit payments due to:

− seasonal demand for the Pharmaceutical Benefits; and

− the timing of fortnightly pension payments; and

• higher grant payments in relation to Department of Education, Science and Training (DEST) grants. Grant payments made by DEST are recognised on a calendar basis in line with the school year and do not, therefore, flow evenly throughout the year.

Investing cash payments and receipts are lower than a pro-rata of the revised Budget, reflecting that payments in relation to the purchase of non-financial assets and proceeds from the sale of non-financial assets do not occur evenly throughout the year.

FISCAL BALANCE

The fiscal balance for the year to date 31 October 2002 was a surplus of $2,771 million. The main components of the fiscal balance are the GFS net operating balance, which was a surplus of $2,648 million, and net capital investment of $123 million for the year to date 31 October 2002 (refer to the Reconciliation of AAS31 Operating Result to Fiscal Balance for further detail).

FINANCIAL OUTCOMES

OPERATING RESULT

The operating result for the year to date 31 October 2002 was a surplus of $2,800 million.

REVENUES

Total revenue for the year to date 31 October was $59,785 million, comprising $53,726 million in taxation revenue and $6,058 million in non-tax revenue.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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The main components in taxation revenue were Pay As You Go (Withholding) ($28,595 million), companies ($11,956 million), excise duty ($6,891 million), and individuals’ refunds, which reduced net revenue by ($6,877 million).

The introduction of The New Tax System affects both the timing and quantity of taxation revenue received by the Commonwealth compared to previous years.

EXPENSES

Total expenses for the year to date 31 October 2002 were $56,984 million, which is 1 per cent lower than a pro-rata of the revised Budget estimate of $57,807 million. Expenses for the year to date are not always directly comparable to full year estimates due to seasonal effects on Commonwealth administered expenses. Many grant programmes for instance are recognised on a quarterly basis in accordance with the terms of the grant agreement or upon completion of project milestones.

Factors affecting expenses are outlined below (including their impact by Function):

• lower suppliers expenses reflecting seasonal patterns in Defence purchasing. (Defence function);

• lower other goods and services expenses due to the intermittent timing of overseas aid projects and project payments throughout the year. The majority of annual payments to Pacific regional organisations under existing arrangements, fall due in December. (General Public Services function);

• lower grants expenses in relation to:

− delays in donor countries reaching agreement on replenishment of the International Development Association (IDA) and the Heavily Indebted Poor Countries Initiative (General Public Services function);

− Home and Community Care due to the timing of claims by States and Territories (Social Security and Welfare function);

− a lower level of expenses on road infrastructure projects for the National Highway and Roads of National Importance Programme. Expenses for this programmes are recognised when approved projects commence and when States meet funding conditions (Transport and Communication function);

• lower personal benefits expenses due to lower than expected customer numbers and seasonal demand for Newstart Allowance, lower than expected customer numbers for Family Tax Benefit, and seasonal fluctuations for Child Care Benefits (Social Security and Welfare function); and

• higher grant expenses in relation to Department of Education, Science and Training grants, which are recognised on a calendar year basis in line with the school year (General Public Services and Education functions).

ASSETS AND LIABILITIES

The net asset balance within the General Government sector has improved from a negative net asset position of $48,457 million at 30 June 2002 as published in the Consolidated Financial Statements to a negative net asset position of $39,883 million at 31 October 2002.

Nick Minchin I J Watt

Minister for Finance Secretary to the Department of

and Administration Finance and Administration

6 December 2002

Contact: Senator Minchin’s Office: David Wawn (02) 6277 7400 Department of Finance: Jim Kerwin (02) 6215 3769

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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COMMONWEALTH GENERAL GOVERNMENT SECTOR - STATEMENT OF FINANCIAL PERFORMANCE

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR*

Note $m $m $m $m

Revenues Taxation Income tax 1 5,325 15,611 42,450 128,183

Indirect tax 2 2,296 2,207 9,174 26,300

Fringe Benefits Tax 1 -59 783 1,538 3,360

Other taxes 170 182 565 1,425

Total Taxation Revenue 7,732 18,782 53,726 159,268

Non-Taxation Sales of goods and services 259 238 1,088 4,006

Interest and dividends 274 1,083 3,815 6,877

Net foreign exchange g ains 17 -14 26 0

Net gains from sales of assets 6 2 42 21

Other sources of non-tax revenue 245 250 1,087 2,962

Total Non-Tax Revenue 801 1,559 6,058 13,867

Total Revenues 8,533 20,342 59,785 173,135

Expenses Goods and Services Employees 1,553 1,576 6,204 19,414

Suppliers 1,069 1,031 4,057 13,022

Depreciation and amortisation 310 278 1,246 3,821

Net w rite dow n of assets 162 143 736 1,814

Net foreign exchange losses 168 -186 194 445

Net losses from the sale of assets 0 2 6 0

Other goods and services expenses 386 547 1,880 5,999

Total Goods and Services 3,648 3,392 14,324 44,516

Subsidies Benefits and Grants Personal benefits 6,091 6,183 25,236 77,608

Subsidies 719 752 3,000 8,850

Grants 2,175 3,423 12,025 35,558

Total Subsidies Benefits and Gr ants 8,985 10,358 40,261 122,015

Interest and Other Interest 569 489 2,394 6,831

Other financing costs 1 1 6 61

Total Inter est and other 570 490 2,400 6,891

Total Expenses 13,203 14,239 56,984 173,422

Operating Result -4,670 6,102 2,800 -287

Extraordinary items 0 0 0 0

-4,670 6,102 2,800 -287

This table is prepared on a AAS 31 basis * As published in the Mid-Year Economic and Fiscal Outlook 2002-03.

Operating r esul t after extr aor dinar y items

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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COMMONWEALTH GENERAL GOVERNMENT SECTOR - STATEMENT OF FINANCIAL POSITION

ACTUAL ACTUAL ESTIM ATE*

as at as at as at

30-Sep-02 31-Oct-02 30-Jun-03

$m $m $m

Assets Financial assets Cash 1,513 1,625 821

R eceivables 28,040 28,520 27,489

Investments 35,550 34,766 27,010

Equity accounted investments 0 0 0

Accrued revenue 679 625 540

Other financial assets 57 33 42

Total financial assets 65,839 65,569 55,901

Non-financial assets Land and buildings 17,006 17,311 16,334

Infrastructure 42,632 42,305 43,947

Intangibles 1,138 1,123 1,221

Inventories 3,803 3,826 3,757

Other non-financial assets 1,338 1,698 1,029

Total non-financial assets 65,917 66,263 66,288

Total assets 131,756 131,832 122,189

Liabilities Debt Government securities 65,955 59,569 51,386

Loans 5,635 5,653 5,729

Leases 238 234 195

Deposits 280 304 300

Other debt 3,274 3,798 2,997

Total debt 75,382 69,558 60,607

Provisions and payables Employees 88,815 88,963 90,682

Suppliers 1,470 1,309 1,936

Personal benefits payable 2,448 2,317 2,937

Subsidies payable 164 188 216

Grants payable 2,923 2,873 8,731

Other provisions and payables 6,499 6,507 5,991

Total pr ovisions and payables 102,319 102,158 110,492

Total liabilities 177,701 171,715 171,098

Net Assets (a) -45,945 -39,883 -48,909

Equity Accumulated results -77,199 -71,526 -80,242

R eserves 31,252 31,643 31,333

Capital 0 0 0

Total equity -45,945 -39,883 -48,909

(a) Opening net assets -48,457 -48,457 -48,473

Operating result after extraordinary items -4,670 2,800 -287

Asset revaluation reserve -13 -11 -125

Other movements 7,195 5,784 -24

Closing net assets -45,945 -39,883 -48,909

This table is prepared on a AAS 31 basis * As published in the Mid-Year Economic and Fiscal Outlook 2002-03.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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COMMONWEALTH GENERAL GOVERNMENT SECTOR - STATEMENT OF CASH FLOWS

ACTUAL A CTUAL A CTUAL E STIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FUL L YE AR*

$m $m $m $m

Oper ating Activities Cash received Taxes 7,333 18,182 51,999 157,529

Sales of goods and services 156 283 1,221 4,117

Interest 249 324 1,118 3,198

Dividends 4 825 2,723 3,590

GST receipts related to purchases/sales 160 280 795 2,308

Other 498 85 1,146 2,417

Total oper ating cash r eceived 8,400 19,979 59,002 173,158

Cash used Payments to employees 1,376 1,425 5,642 17,145

Payments to suppliers 1,061 1,358 4,983 15,361

Subsidies paid 589 617 3,079 8,278

Personal benefits 6,020 6,721 26,102 77,457

Grant payments 2,470 3,405 12,249 35,341

Interest and other financing costs 602 577 2,466 6,768

GST payments related to purchases/sales 8 6 47 118

Other 71 744 1,895 5,988

Total oper ating cash used 12,197 14,853 56,463 166,457

Net Cash fr om Oper ating Activities -3,797 5,126 2,539 6,702

Investing Activities Net Cash received/(used) Proceeds from asset sales program 0 0 0 10

Proceeds from sales of property, plant and equipment and intangibles 41 26 143 1,425

Net loans, advances and HECS 185 192 293 -189

Purchase of property, plant and equipment and intangibles -329 -652 -1,964 -6,339

Other investing cash receipts/(payments) 440 786 2,256 9,587

Net Cash fr om Investing Activities 337 352 728 4,493

Financing Activities Net Cash received/(used)

Net repayments of borrow ings 3,379 -6,173 -4,500 -12,608

Other financing cash receipts/(payments) -168 807 627 28

Net cash fr om Financing Activities 3,211 -5,366 -3,873 -12,579

Net incr ease / (decr ease) in cash hel d -249 112 -606 -1,385

This table is prepared on a AAS 31 basis * As published in the Mid-Year Economic and Fiscal Outlook 2002-03.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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COMMONWEALTH ENERAL GOVERNMENT SECTOR - STATEMENT OF FINANCIAL PERFORMANCE BY FUNCTION

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR*

$m $m $m $m

Revenues by Sour ce Taxation 7,732 18,782 53,726 159,268

Non-taxation 801 1,559 6,058 13,867

Total r evenues 8,533 20,342 59,785 173,135

Expenses by P ur pose General Public Services 735 844 3,368 11,256

Defence 1,157 950 3,985 12,311

Public Order and Safety 144 140 629 2,078

Education 768 1,633 5,017 12,607

Health 2,327 2,368 9,723 29,377

Social Security and W elfare 5,614 5,954 23,623 72,690

Housing and Community Amenities 120 178 610 1,901

R ecreation and Culture 114 164 670 2,108

Fuel and Energy 230 280 1,188 3,523

Agriculture, Forestry and Fishing 115 111 412 1,814

Mining and Mineral R esources (other than fuels); Manufacturing and Construction 119 140 503 1,622

Transport and Communication 173 235 692 2,328

Other Economic Affairs 291 286 1,237 4,072

Other Purposes Public Debt Interest 707 299 2,482 6,980

Nominal Superannuation Interest 407 420 1,654 5,025

General Purpose Inter-Government Transactions 179 239 1,190 4,216

Natural Disaster Relief 0 0 2 139

Contingency R eserve 0 0 0 -623

Asset Sales 0 0 0 0

Total Expenses 13,203 14,239 56,984 173,422

Operating Result -4,670 6,102 2,800 -287

This table is prepared on a AAS 31 basis * Data in this table is consistent w ith that published in the Mid-Year Economic and Fiscal Outlook 2002-03.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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COMMONWEALTH GENERAL GOVERNMENT SECTOR - RECONCILIATION OF AAS31 OPERATING RESULT TO FISCAL BALANCE

COMMONWEALTH GENERAL GOVERNMENT SECTOR - DERIVATION OF UNDERLYING AND HEADLINE BALANCE

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR* $m $m $m $m

Net cash from operating activities -3,797 5,126 2,539 6,702

Plus: Paym ents classified as GFS adjustments (a) -214 105 69 339

Plus: Net cash from investm ents in non-financial assets Proceeds from sales of property, plant and equipment and intangibles 41 26 143 1,425

Less: Purchase of property, plant and equipment and intangibles 329 652 1,964 6,339

Less: Finance leases and sim ilar arrangem ents -4 -4 -22 -15

Underl ying Cash Balance -4,295 4,609 809 2,141

Plus: Net Advances Proceeds from asset sales program 0 0 0 10

Net advance receipts/(payments) (b) 166 174 218 -414

Equals Headline C ash Balance -4,129 4,783 1,027 1,737

* Data in this table are consistent w ith that published in the Mid-Year Economic and Fiscal Outlook 2002-03.

(b) Includes transactions classified as net advances for GFS purposes.

(a) Includes public non-financial corporations principal repayments, cost of asset sales, sw ap transactions, IDA/ADF and public debt interest adjustments.

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR* $m $m $m $m

AAS31 Oper ating r esult -4,670 6,102 2,800 -287

less assets recognised for the first time 28 -4 24 415

plus revaluations / w ritedow ns from superannuation 0 0 0 0

plus w ritedow n of assets/bad and doubtful debts 162 143 736 1,814

less mutually agreed w ritedow ns 72 87 366 235

plus net foreign exchange losses 152 -172 168 445

plus other economic revaluations (a) -40 -41 -118 -784

less profit (loss) on the sale of assets 6 0 36 21

plus Defence w eapons platform depreciation 157 132 668 2,056

less Defence w eapons platform investment 267 545 1,180 3,616

GFS Net Oper ating Balance -4,612 5,536 2,648 -1,043

less purchase of property plant and equipment and intangibles 423 682 1,731 6,346

less net assets acquired under finance leases -4 -4 -22 -15

less other non-financial assets 77 33 37 -9

less increase in inventories 35 11 30 -42

plus proceeds from sales of property, plant and equipment 41 26 141 1,394

plus Defence w eapons platform investment 267 545 1,180 3,616

plus depreciation and amortisation excl w eapons 153 146 578 1,765

Fiscal Balance (GFS Net Lending) -4,682 5,531 2,771 -548

* Data in this table is consistent w ith that published in the Mid-Year Economic and Fiscal Outlook 2002-03.

(a) Net repurchase premia (accruals basis), net losses/gains on sw ap transactions, cost of asset sales, IDA/ADF payments and public non-financial corporations superannuation revenue are included in this item.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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NOTES:

With the introduction of Business Activity Statements and Instalment Activity Statements last financial year, 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.

NOTE 1: INCOME TAX

NOTE 2: INDIRECT TAX

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR*

$m $m $m $m

Excise duty 1,709 1,583 6,891 20,160

Customs duty 534 546 2,029 5,330

Other indirect tax 53 78 254 810

Total indir ect tax r evenue 2,296 2,207 9,174 26,300

* As published in the Mid-Year Economic and Fiscal Outlook 2002-03.

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR*

$m $m $m $m

INDIVIDUALS AND OTHER WITHHOLDING TAX Gross income tax w ithholding (a)(b) 6,230 7,757 28,595 85,680

Gross other individuals (c) 639 2,148 5,956 17,430

Less refunds 1,802 1,538 6,877 11,130

Total individuals and other withholding tax 5,067 8,367 27,674 91,980 OTHER SOURCES Companies 22 5,729 11,956 30,073

Superannuation funds (d) 28 891 2,028 4,480

Petroleum Resource Rent Tax 208 624 792 1,650

Total income tax from other sources 258 7,244 14,776 36,203

Total income tax 5,325 15,611 42,450 128,183

Fringe Benefits tax (e) - 59 783 1,538 3,360

* As published in the Mid-Year Economic and Fiscal Outlook 2002-03.

(a) The Pay As You Go (PAYG) system w as introduced generally from 1 July 2000. It includes revenue from taxpayers w ho w ere previously subject to PAYE w ithholding arrangements, or w ho w ere in the PPS and w ill now be subject to PAYG w ithholding arrangements from 1 July 2000.

(b) Previously reported as Pay As You Go (Withholding) and other w ithholding. Other w ithholding w as previously reported under other sources of income tax, and includes amounts w ithheld 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.

(c) Includes individuals making PAYG instalment payments. (d) Includes superannuation contributions surcharge. (e) Negative collections indicate refunds exceed collections.

6 December 2002 Contact: Office of the Minister for Finance and Administration (02) 6277 7400

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

NOTE 3: GOODS AND SERVICES TAX

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 Commonwealth 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 Commonwealth (central) government that meet the coverage and

timeliness requirements of the SDDS are published on the AOFM website at http://www.aofm.gov.au/borrowing_programme/CommonwealthGovernmentSecurities.htm. In accordance with the IMF SDDS, quarter ahead notice of the approximate date of release of the data on debt guaranteed by the Commonwealth (central) government, is given on the IMF's Data Dissemination Bulletin Board at http://dsbb.imf.org.

ACTUAL ACTUAL ACTUAL ESTIM ATE

2002-2003 2002-2003 2002-2003 2002-2003

September October CUM ULATIVE YTD October FULL YEAR* $m $m $m $m

(collected on behalf of the States)

* As published in the Mid-Year Economic and Fiscal Outlook 2002-03. (a) GST revenue is presented in this note on an accrual basis. This differs slightly from GST cash receipts, on w hich payments to the States and Territories are based.

29,940

GST R evenue (a)

1,865 4,249 11,350