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2002-2003 Consolidated Financial Statements.



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4 December 2003 36/2003

2002-2003 Consolidated Financial Statements

The Australian Government’s record of sound financial management was strengthened today with the release of the Consolidated Financial Statements revealing a $2.7 billion accrual operating surplus for the whole of the public sector in 2002-03.

Releasing the Government’s Consolidated Financial Statements, Finance Minister Senator Nick Minchin said the statements presented the whole-of-government financial results of all Commonwealth controlled entities, including government-owned business enterprises such as Telstra and Australia Post.

The accounts differ from the Final Budget Outcome document, released in September, as the latter is confined to the General Government sector. The Consolidated Financial Statements by contrast, incorporates all public sector entities and is prepared on an accrual basis, in accordance with Australian Accounting Standards. The operating surplus of $2.7 billion in 2002-03 comes after a small accrual operating deficit in 2001-02.

Senator Minchin said the 2002-03 operating surplus was primarily due to Australia’s strong economic growth that delivered more jobs, higher wages and increased company and small business profitability, which has generated additional government revenue. A continued reduction in borrowing expenses during the year also contributed to the strong result.

Following this strong result in 2002-03 the Australian Government was able to deliver significant tax cuts to all Australians in 2003-04.

Senator Minchin said the Australian Government had continued to generate positive cash flows over the last six years, including a net cash flow of $9 billion from operating and investing activities undertaken in 2002-2003. This made possible a $4.9 billion reduction in interest bearing liabilities in 2002-03, contributing to a $46.1 billion reduction in interest bearing liabilities since 1996.

This reduction in interest bearing liabilities is a key component of the Howard Government’s $66.6 billion reduction in General Government net debt inherited from the former Labor Government in 1996. The Government’s balance sheet was further strengthened in 2002-03, with total assets increasing by $8.2 billion or 4%, and the ratio of current assets to current liabilities rising to 141%, up from 93% in 1996-97.

The Consolidated Financial Statements are based on Australian Accounting Standards and show the results of the Australian Government’s operations and cash flows for the year ended 30 June 2003 and the Government’s financial position as at 30 June 2003.

The publication of the Consolidated Financial Statements, as well as the publication of monthly financial statements for the general government sector, demonstrates the Australian Government’s commitment to providing greater accountability and transparency in financial management and whole of government reporting.

An electronic version of the 2002-03 CFS can be found at www.finance.gov.au

Media contact: Jennifer Eddy 02 62777400