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Australian Government general government sector monthly financial statements October 2019



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

MEDIA RELEASE

Friday, 22 November 2019

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR MONTHLY FINANCIAL STATEMENTS October 2019

KEY POINTS • The Monthly Financial Statements for October 2019 report the budget position against the expected monthly profile for the 2019-20 financial year through the year to 31 October 2019.

• The underlying cash balance for the 2019-20 financial year to 31 October 2019 was a deficit of $14,723 million, which is $425 million lower (better) than expected at the time of the 2019-20 Budget. This is a further $306 million improvement compared to the position against the Budget profile at the end of September.

• Net debt as at 31 October 2019 was $394,770 million, which is $6,979 million lower than the balance at the end of September, largely driven by a change in Australian Government Securities on issue and investments held.

AGGREGATES

ACTUAL 2019-2020 October $m

ACTUAL 2019-2020 YTD October $m

Budget Profile 2019-2020 YTD October $m

BUDGET ESTIMATE* 2019-2020 FULL YEAR

$m

Revenue 44,330 154,934 155,309 513,763

Expenses 42,654 168,466 167,184 500,872

Net operating balance 1,676 -13,532 -11,875 12,891

Net capital investment 808 249 1,536 4,749

Fiscal balance 869 -13,781 -13,411 8,142

Receipts(a) 45,113 153,183 152,358 505,521

less Payments(b) 45,460 166,034 165,803 493,327

less Net Future Fund earnings 523 1,872 1,703 5,140

Underlying cash balance(c) -871 -14,723 -15,148 7,054

Headline cash balance -1,276 -15,782 -18,517 -4,388

Total assets 606,577 611,012

Total liabilities 1,167,953 944,336

Net w orth(d) -561,376 -333,324

Net debt(e) 394,770 361,040

*As published in the 2019-20 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.

Monthly results are generally volatile due to timing differences between revenue and receipts, and expenses and payments. Historically, expenses and payments exceed revenue and receipts in the first half of the financial year. Therefore, care needs to be taken when comparing monthly or cumulative data across years and to full-year estimates, as revenue and receipts and expenses and payments vary from month to month.

FISCAL OUTCOMES

Underlying Cash Balance The underlying cash balance for the financial year to 31 October 2019 was a deficit of $14,723 million, which is $425 million lower than the 2019-20 Budget profile deficit of $15,148 million.

• Receipts Total receipts were $825 million higher than the 2019-20 Budget profile.

• Payments Total payments were $231 million higher than the 2019-20 Budget profile.

Net Operating Balance The net operating balance for the year to 31 October 2019 was a deficit of $13,532 million, which is $1,657 million higher than the 2019-20 Budget profile deficit of $11,875 million. The difference results from lower than expected revenue and higher expenses.

Fiscal Balance The fiscal balance for the year to 31 October 2019 was a deficit of $13,781 million, which is $370 million higher than the 2019-20 Budget profile deficit of $13,411 million. The difference results from lower than expected revenue, higher expenses and lower net capital investment.

Assets and Liabilities As at 31 October 2019: • net worth is negative $561,376 million; • net debt is $394,770 million; and • net financial liabilities are $771,212 million.

Senator the Hon. Mathias Cormann Rosemary Huxtable PSM

Minister for Finance Secretary

Department of Finance

Media Contacts Karen Wu 0428 350 139

Australian Government general government sector operating statement

Note

ACTUAL 2019-2020 October $m

ACTUAL 2019-2020 YTD October $m

Budget Profile 2019-2020 YTD October $m

BUDGET ESTIMATE* 2019-2020 FULL YEAR

$m

Revenue Taxation revenue 1,2 41,189 142,944 144,855 476,596

Sales of goods and services 634 4,480 4,310 15,757

Interest income 406 1,488 1,455 6,009

Dividend income 569 1,845 1,685 6,112

Other 1,533 4,178 3,004 9,290

Total revenue 44,330 154,934 155,309 513,763

Expenses Gross operating expenses Wages and salaries(a) 1,744 6,845 6,996 21,348

Superannuation 662 2,792 1,996 5,907

Depreciation and amortisation 544 2,842 2,762 8,505

Supply of goods and services 10,455 42,281 40,889 125,566

Other operating expenses(a) 622 2,490 2,328 6,873

Total gross operating expenses 14,028 57,250 54,971 168,199

Superannuation interest expense 719 2,877 3,709 11,127

Interest expenses 1,450 5,778 5,838 19,264

Current transfers Current grants 14,341 53,014 52,474 150,408

Subsidy expenses 1,016 3,990 4,135 12,661

Personal benefits 10,680 44,457 44,846 128,972

Total current transfers 26,036 101,461 101,454 292,040

Capital transfers Mutually agreed w rite-dow ns 133 554 506 1,368

Other capital grants 289 547 706 8,874

Total capital transfers 421 1,101 1,212 10,241

Total expenses 3 42,654 168,466 167,184 500,872

Net operating balance 1,676 -13,532 -11,875 12,891

Other economic flow s - included in operating result

Net w rite-dow ns of assets -573 -1,911 -2,599 -7,996

Assets recognised for the first time 5 38 59 190

Actuarial revaluations 7 27 18 54

Net foreign exchange gains 688 -824 0 61

Net sw ap interest received -73 -283 0 0

Market valuation of debt 5,482 -4,408 1,858 5,040

Other gains/(losses) -991 2,034 602 3,090

Total other economic flow s - included in operating result

4,544 -5,328 -62 439

Operating Result(b) 6,220 -18,860 -11,937 13,330

Non-ow ner movements in equity Revaluation of equity investments -3 -3 0 -6,017

Actuarial revaluations 0 0 0 262

Other economic revaluations 1,085 945 175 -10

Total other economic flow s - included in equity 1,082 942 175 -5,765

Comprehensive result - Total change in net w orth 7,302 -17,918 -11,762 7,565

Net operating balance 1,676 -13,532 -11,875 12,891

Net acquisition of non-financial assets Purchases of non-financial assets 1,365 3,334 4,283 14,425

less Sales of non-financial assets 16 40 28 1,171

less Depreciation 544 2,842 2,762 8,505

plus Change in inventories -3 -230 25 3

plus Other movements in non-financial assets 6 27 18 -3

Total net acquisition of non-financial assets 808 249 1,536 4,749

Fiscal balance (Net lending/borrow ing)(c) 869 -13,781 -13,411 8,142

*As published in the 2019-20 Budget. (a) Consistent with the 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.

Australian Government general government sector balance sheet

ACTUAL as at

31 October 2019 $m

BUDGET ESTIMATE* as at 30 June 2020 $m

Assets Financial assets Cash and deposits 9,465 5,342

Advances paid 77,108 83,302

Investments, loans and placements 180,977 188,358

Other receivables 59,242 57,430

Equity investments

Investments in other public sector entities 57,635 48,324

Equity accounted investments 3,511 3,562

Investments - shares 66,438 70,034

Total financial assets 454,376 456,352

Non-financial assets Land 11,933 11,484

Buildings 27,084 27,589

Plant, equipment and infrastructure 83,504 86,178

Inventories 8,674 8,045

Intangibles 8,738 9,353

Investment properties 196 193

Biological assets 24 14

Heritage and cultural assets 11,689 11,594

Assets held for sale 298 179

Other non-financial assets 62 31

Total non-financial assets 152,201 154,660

Total assets 606,577 611,012

Liabilities Interest bearing liabilities Deposits held 328 381

Government securities 642,849 619,463

Loans 17,621 16,731

Other borrow ing 1,521 1,466

Total interest bearing liabilities 662,319 638,042

Provisions and payables Superannuation liability(a) 417,711 230,748

Other employee liabilities 26,172 20,591

Suppliers payables 7,222 6,809

Personal benefits payables 2,499 3,746

Subsidies payables 3,962 1,210

Grants payables 2,022 3,927

Other payables 4,945 2,202

Provisions 41,100 37,060

Total provisions and payables 505,634 306,294

Total liabilities 1,167,953 944,336

Net w orth(b) -561,376 -333,324

Net financial worth(c) -713,577 -487,984

Net financial liabilities(d) 771,212 536,308

Net debt(e) 394,770 361,040

*As published in the 2019-20 Budget. (a) For budget reporting purposes, a discount rate of 5 per cent determined by actuaries in preparing the 2017 Long Term Cost Reports is used to value the superannuation liability. This reflects the average annual rate estimated to apply over the term of the liability and it reduces the volatility in reported liabilities that would occur from year to year if the spot rates on long-term government bonds were used. Consistent with AAS, the superannuation liability for the 2019-20 Monthly Financial Statements was calculated using the spot rates on long-term government bonds as at 30 June 2019 that best matched each individual scheme’s liability duration. These rates were between 1.4 and 1.9 per cent per annum. (b) Net worth equals 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.

Australian Government general government sector cash flow statement(a)

ACTUAL 2019-2020 October $m

ACTUAL 2019-2020 YTD October $m

Budget Profile 2019-2020 YTD October $m

BUDGET ESTIMATE* 2019-2020 FULL YEAR

$m

Cash receipts from operating activities

Taxes received 38,623 136,260 137,156 466,397

Receipts from sales of goods and services 2,401 6,221 4,534 15,745

Interest receipts 512 1,583 1,844 5,701

Dividends and income tax equivalents 664 3,661 1,677 6,165

Other receipts 2,895 5,424 7,111 9,897

Total operating receipts 45,095 153,149 152,322 503,906

Cash payments for operating activities Payments for employees(b) -3,324 -10,154 -10,224 -31,101

Payments for goods and services -10,154 -42,056 -40,487 -123,277

Grants and subsidies paid -15,487 -58,042 -57,445 -171,775

Interest paid -3,712 -4,812 -4,936 -16,638

Personal benefit payments -11,363 -45,300 -46,084 -129,783

Other payments(b) -541 -2,500 -2,499 -6,493

Total operating payments -44,581 -162,864 -161,675 -479,066

Net cash flow s from operating activities 514 -9,715 -9,353 24,840

Cash flow s from investments in non-financial assets Sales of non-financial assets 18 34 36 1,615

Purchases of non-financial assets -869 -3,170 -4,128 -14,261

Net cash flow s from investments in non-financial assets -850 -3,136 -4,093 -12,647

Net cash flow s from investments in financial assets for policy purposes -929 -2,931 -5,071 -16,581

Net cash flow s from investments in financial assets for liquidity purposes 11,612 6,086 13,018 -12,248

Cash flow s from financing activities Borrow ing (net) -7,707 11,966 2,753 16,945

Other financing (net) -782 -1,326 -967 -2,531

Net cash flow s from financing activities -8,489 10,640 1,786 14,414

Net increase/(decrease) in cash held 1,858 944 -3,712 -2,222

GFS cash surplus(+)/deficit(-)(c) -336 -12,851 -13,445 12,193

less Finance leases and similar arrangements(d) 11 0 0 0

less Net Future Fund earnings 523 1,872 1,703 5,140

Equals underlying cash balance(e) -871 -14,723 -15,148 7,054

plus Net cash flow s from investments in financial assets for policy purposes -929 -2,931 -5,071 -16,581

plus Net Future Fund earnings 523 1,872 1,703 5,140

Equals headline cash balance -1,276 -15,782 -18,517 -4,388

*As published in the 2019-20 Budget. (a) A positive number denotes a cash inflow; a negative number denotes a cash outflow. (b) Consistent with the ABS GFS classification, other employee related payments are reported under other payments. (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 ABS.

Note 1: Income Tax

Note 2: Indirect Tax

Note 3: Total expenses by function

ACTUAL 2019-2020 October $m

ACTUAL 2019-2020 YTD October $m

Budget Profile 2019-2020 YTD October $m

BUDGET ESTIMATE* 2019-2020 FULL YEAR

$m

Individuals and other w ithholding taxes

Gross income tax w ithholding 18,266 71,525 71,102 219,800

Gross other individuals 5,976 17,099 16,112 51,200

less Refunds 3,925 24,174 23,253 36,900

Total individuals and other w ithholding taxation 20,317 64,451 63,961 234,100

Fringe benefits tax 901 1,857 1,839 4,040

Company tax 7,691 29,518 31,115 100,600

Superannuation fund taxes 869 3,638 3,853 9,750

Petroleum resource rent tax 299 596 804 1,290

Total income taxation revenue 30,077 100,060 101,572 349,780

*As published in the 2019-20 Budget.

ACTUAL 2019-2020 October $m

ACTUAL 2019-2020 YTD October $m

Budget Profile 2019-2020 YTD October $m

BUDGET ESTIMATE* 2019-2020 FULL YEAR

$m

Goods and services tax 7,246 23,215 23,561 69,630

Wine equalisation tax 72 320 291 1,100

Luxury car tax 54 228 207 640

Excise duty 1,795 8,116 8,248 24,140

Customs duty 1,329 8,226 7,938 21,120

Other indirect tax 615 2,779 3,039 10,185

Total indirect taxation revenue 11,112 42,884 43,283 126,815

*As published in the 2019-20 Budget.

ACTUAL 2019-2020 October $m

ACTUAL 2019-2020 YTD October $m

BUDGET ESTIMATE* 2019-2020 FULL YEAR

$m

Expenses by function General public services 2,069 7,666 23,614

Defence 2,381 10,882 32,243

Public order and safety 497 2,012 5,919

Education 4,938 13,558 36,350

Health 6,929 28,016 81,777

Social security and w elfare 15,098 62,414 180,125

Housing and community amenities 367 1,386 5,907

Recreation and culture 163 1,096 3,849

Fuel and energy 660 2,632 8,171

Agriculture, forestry and fishing 208 766 2,871

Mining, manufacturing and construction 215 883 3,422

Transport and communication 480 1,027 9,038

Other economic affairs 852 3,239 9,297

Other purposes Public debt interest 1,401 5,549 17,037

Nominal superannuation interest 719 2,877 11,127

General purpose inter-government transactions 5,677 24,463 70,328

Natural disaster relief 0 0 11

Contingency reserve 0 0 -216

Total expenses 42,654 168,466 500,872

*As published in the 2019-20 Budget.

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.

Australian Accounting Standard 16 - Leases

The new Australian Accounting Standard AASB 16 Leases (AASB 16), applies to all Australian Government entities from 1 July 2019. The effect of AASB 16 is to introduce a single lease accounting framework. This is achieved by removing the current distinction between operating and finance leases. As a result, leases that were previously accounted for as operating expenses and payments will be included as additional assets and liabilities on the balance sheet. For whole of Government and General Government Sector Financial Reporting, the implementation of AASB 16 will be reflected in the 2019-20 Mid-Year Economic and Fiscal Outlook estimates, and in the Australian Government General Government Sector Monthly Financial Statements from December 2019.

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 https://www.aofm.gov.au/data-hub.

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.