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Australian Government General Government sector monthly financial statements: September 2018



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

Senator the Hon Mathias Cormann, Minister for Finance and the Public Service, Perth

Thursday, 25 October 2018

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR MONTHLY FINANCIAL STATEMENTS September 2018

KEY POINTS • The underlying cash balance for the 2018-19 financial year to 30 September 2018 was a deficit of $10,525 million.

• The fiscal balance for the 2018-19 financial year to 30 September 2018 was a deficit of $10,149 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 2018-2019 September $m

ACTUAL 2018-2019

YTD September $m

Budget Profile 2018-2019 YTD September $m

BUDGET ESTIMATE* 2018-2019 FULL YEAR

$m

Revenue 31,157 107,460 101,521 486,141

Expenses 36,603 117,834 121,543 488,584

Net operating balance -5,446 -10,373 -20,022 -2,443

Net capital investment 161 -224 1,392 4,989

Fiscal balance -5,607 -10,149 -21,414 -7,431

Receipts(a) 32,202 107,574 100,880 473,745

less Payments(b) 36,721 116,798 119,515 484,648

less Net Future Fund earnings 473 1,302 891 3,559

Underlying cash balance(c) -4,991 -10,525 -19,526 -14,462

Headline cash balance -5,618 -12,585 -22,111 -27,562

Total assets 560,442 567,956

Total liabilities 986,433 905,565

Net worth(d) -425,991 -337,609

Net debt(e) 350,887 349,851

*As published in the 2018-19 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 separately. (d) Net worth is calculated as total assets minus total liabilities. (e) Net debt equals the sum of interest bearing liabilities (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 30 September 2018 was a deficit of $10,525 million, which is $9,001 million lower than the 2018-19 Budget profile deficit of $19,526 million.

• Receipts Total receipts were $6,694 million higher than the 2018-19 Budget profile.

• Payments Total payments were $2,717 million lower than the 2018-19 Budget profile.

Net Operating Balance The net operating balance for the year to 30 September 2018 was a deficit of $10,373 million, which is $9,649 million better than the 2018-19 Budget profile deficit of $20,022 million. The difference primarily results from higher than expected revenue and lower expenses.

Fiscal Balance The fiscal balance for the year to 30 September 2018 was a deficit of $10,149 million, which is $11,264 million better than the 2018-19 Budget profile deficit of $21,414 million. As with the net operating balance, the difference primarily results from higher than expected revenue, lower expenses and lower net capital investments.

Assets and Liabilities As at 30 September 2018: • net worth is negative $425,991 million; • net debt is $350,887 million; and • net financial liabilities are $629,062 million.

Senator the Hon. Mathias Cormann Rosemary Huxtable PSM

Minister for Finance and the Public Service Secretary Department of Finance

Media Contacts Karen Wu 0428 350 139

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Australian Government general government sector operating statement

Note

ACTUAL 2018-2019 September $m

ACTUAL 2018-2019

YTD September $m

Budget Profile 2018-2019 YTD September $m

BUDGET ESTIMATE* 2018-2019 FULL YEAR

$m

Revenue

Taxation revenue 1,2 28,511 99,608 93,612 452,001

Sales of goods and services 1,089 3,267 3,525 14,490

Interest income 413 936 1,062 4,442

Dividend income 466 1,278 767 4,126

Other 679 2,371 2,555 11,082

Total revenue 31,157 107,460 101,521 486,141

Expenses

Gross operating expenses Wages and salaries(a) 1,549 4,899 4,988 20,411

Superannuation 510 1,839 1,790 6,022

Depreciation and amortisation 634 2,134 2,261 9,023

Supply of goods and services 9,613 27,792 29,586 119,633

Other operating expenses(a) 530 1,507 1,545 6,045

Total gross operating expenses 12,836 38,171 40,169 161,134

Superannuation interest expense 806 2,419 2,445 10,648

Interest expenses 1,447 4,477 4,653 19,045

Current transfers Current grants 10,051 35,796 36,304 149,042

Subsidy expenses 962 2,857 2,938 12,055

Personal benefits 10,243 33,334 33,550 126,429

Total current transfers 21,255 71,988 72,793 287,525

Capital transfers Mutually agreed write-downs 98 360 371 1,494

Other capital grants 161 418 1,112 8,738

Total capital transfers 259 778 1,483 10,232

Total expenses 3 36,603 117,834 121,543 488,584

Net operating balance -5,446 -10,373 -20,022 -2,443

Other economic flows - included in operating result

Net write-downs of assets (including bad and doubtful debts) -353 -1,313 -1,911 -8,867

Assets recognised for the first time 17 50 50 200

Actuarial revaluations 6 17 10 41

Net foreign exchange gains 240 -576 0 130

Net swap interest received -91 -218 0 0

Market valuation of debt 5,576 2,281 385 1,315

Other gains/(losses) -2,890 1,865 1,285 3,633

Total other economic flows - included in operating result

2,504 2,106 -181 -3,547

Operating Result(b) -2,942 -8,267 -20,203 -5,990

Non-owner movements in equity Revaluation of equity investments 414 1 -40 -6,091

Actuarial revaluations 0 0 0 81

Other economic revaluations 488 411 4,450 -377

Total other economic flows - included in equity 902 412 4,410 -6,387

Comprehensive result - Total change in net worth -2,040 -7,855 -15,793 -12,377

Net operating balance -5,446 -10,373 -20,022 -2,443

Net acquisition of non-financial assets Purchases of non-financial assets 848 2,032 3,208 14,222

less Sales of non-financial assets 17 36 75 287

less Depreciation 634 2,134 2,261 9,023

plus Change in inventories -26 -113 505 75

plus Other movements in non-financial assets -10 27 14 1

Total net acquisition of non-financial assets 161 -224 1,392 4,989

Fiscal balance (Net lending/borrowing)(c) -5,607 -10,149 -21,414 -7,431

*As published in the 2018-19 Budget. (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) The term fiscal balance is not used by the ABS.

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Australian Government general government sector balance sheet

ACTUAL as at

30 September 2018 $m

BUDGET ESTIMATE* as at 30 June 2019 $m

Assets

Financial assets

Cash and deposits 5,884 5,875

Advances paid 58,541 73,041

Investments, loans and placements 184,263 183,513

Other receivables 54,111 55,983

Equity investments Investments in other public sector entities 58,564 51,976

Equity accounted investments 144 331

Investments - shares 54,428 51,928

Total financial assets 415,936 422,648

Non-financial assets Land 11,619 10,650

Buildings 26,515 26,622

Plant, equipment and infrastructure 78,138 78,346

Inventories 8,497 7,874

Intangibles 7,855 9,819

Investment property 26 159

Biological assets 32 54

Heritage and cultural assets 11,605 11,636

Assets held for sale 160 85

Other non-financial assets 59 62

Total non-financial assets 144,507 145,308

Total assets 560,442 567,956

Liabilities Interest bearing liabilities Deposits held 346 218

Government securities 580,692 594,437

Loans 17,017 16,090

Other borrowing 1,519 1,534

Total interest bearing liabilities 599,575 612,280

Provisions and payables Superannuation liability(a) 315,514 223,564

Other employee liabilities 20,250 18,902

Suppliers payables 6,672 8,203

Personal benefits payables 3,441 3,038

Subsidies payables 595 1,114

Grants payables 2,340 3,072

Other payables 2,618 2,236

Provisions 35,428 33,157

Total provisions and payables 386,858 293,285

Total liabilities 986,433 905,565

Net worth(b) -425,991 -337,609

Net financial worth(c) -570,497 -482,917

Net financial liabilities(d) 629,062 534,893

Net debt(e) 350,887 349,851

*As published in the 2018-19 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 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 interest bearing liabilities (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 2018-2019 September $m

ACTUAL 2018-2019

YTD September $m

Budget Profile 2018-2019 YTD September $m

BUDGET ESTIMATE* 2018-2019 FULL YEAR

$m

Cash receipts from operating activities

Taxes received 29,712 98,028 91,593 440,480

Receipts from sales of goods and services 711 3,012 3,440 14,551

Interest receipts 292 1,100 821 4,257

Dividends and income tax equivalents 546 2,007 1,004 3,970

Other receipts 929 3,399 3,947 9,767

Total operating receipts 32,189 107,547 100,805 473,026

Cash payments for operating activities

Payments for employees -2,228 -6,613 -7,433 -29,718

Payments for goods and services -9,298 -29,225 -30,222 -117,209

Grants and subsidies paid -11,287 -39,961 -41,094 -169,900

Interest paid -2,380 -3,027 -1,790 -18,749

Personal benefit payments -10,297 -34,004 -34,115 -129,372

Other payments -323 -1,537 -1,612 -5,717

Total operating payments -35,813 -114,366 -116,266 -470,664

Net cash flows from operating activities -3,624 -6,820 -15,461 2,362

Cash flows from investments in non-financial assets

Sales of non-financial assets 13 28 75 720

Purchases of non-financial assets -908 -2,430 -3,249 -13,984

Net cash flows from investments in non-financial assets -895 -2,402 -3,174 -13,265

Net cash flows from investments in financial assets for policy purposes -1,099 -3,361 -3,476 -16,659

Cash flows from investments in financial assets for liquidity purposes

Increase in investments -4,683 6,289 6,788 1,359

Net cash flows from investments in financial assets for liquidity purposes -4,683 6,289 6,788 1,359

Cash flows from financing activities

Borrowing (net) 5,641 5,810 15,184 29,358

Other financing (net) 180 -411 -372 -2,643

Net cash flows from financing activities 5,821 5,399 14,812 26,715

Net increase/(decrease) in cash held -4,480 -894 -511 512

GFS cash surplus(+)/deficit(-)(b) -4,519 -9,222 -18,635 -10,903

less Finance leases and similar arrangements(c) 0 2 0 0

less Net Future Fund earnings 473 1,302 891 3,559

Equals underlying cash balance(d) -4,991 -10,525 -19,526 -14,462

plus Net cash flows from investments in financial assets for policy purposes -1,099 -3,361 -3,476 -16,659

plus Net Future Fund earnings 473 1,302 891 3,559

Equals headline cash balance -5,618 -12,585 -22,111 -27,562

*As published in the 2018-19 Budget. (a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow. (b) GFS cash surplus/deficit equals net cash flows from operating activities and investments in non-financial assets. (c) 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. (d) 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 2018-2019 September $m

ACTUAL 2018-2019

YTD September $m

Budget Profile 2018-2019 YTD September $m

BUDGET ESTIMATE* 2018-2019 FULL YEAR

$m

Individuals and other withholding taxes

Gross income tax withholding 16,613 50,810 50,079 203,800

Gross other individuals 1,642 10,175 10,095 49,600

less Refunds 3,277 15,520 16,083 30,500

Total individuals and other withholding taxation 14,977 45,465 44,092 222,900

Fringe benefits tax -50 837 918 4,310

Company tax 6,274 21,806 17,496 91,200

Superannuation fund taxes 602 3,010 2,717 10,360

Petroleum resource rent tax -59 205 333 1,420

Total income taxation revenue 21,744 71,324 65,555 330,190

*As published in the 2018-19 Budget.

ACTUAL 2018-2019 September $m

ACTUAL 2018-2019

YTD September $m

Budget Profile 2018-2019 YTD September $m

BUDGET ESTIMATE* 2018-2019 FULL YEAR

$m

Goods and services tax 3,377 16,039 16,159 70,310

Wine equalisation tax 76 219 213 1,010

Luxury car tax 54 177 179 740

Excise duty 1,813 5,757 5,644 23,120

Customs duty 818 3,951 3,648 16,500

Other indirect tax 629 2,141 2,214 10,131

Total indirect taxation revenue 6,766 28,284 28,057 121,811

*As published in the 2018-19 Budget.

ACTUAL 2018-2019 September $m

ACTUAL 2018-2019

YTD September $m

BUDGET ESTIMATE* 2018-2019 FULL YEAR

$m

Expenses by function General public services 1,729 8,551 23,065

Defence 2,838 7,314 31,215

Public order and safety 432 1,448 5,324

Education 1,729 8,263 34,736

Health 6,019 16,685 78,825

Social security and w elfare 13,168 43,301 175,971

Housing and community amenities 336 900 5,382

Recreation and culture 106 732 3,638

Fuel and energy 617 1,763 7,541

Agriculture, forestry and fishing 207 542 3,070

Mining, manufacturing and construction 236 719 3,260

Transport and communication 433 861 9,062

Other economic affairs 824 2,328 9,471

Other purposes Public debt interest 1,421 4,363 17,811

Nominal superannuation interest 806 2,419 10,648

General purpose inter-government transactions 5,701 17,642 69,446

Natural disaster relief 0 0 17

Contingency reserve 0 0 101

Total expenses 36,603 117,834 488,584

*As published in the 2018-19 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/.

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.