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Commonwealth Government monthly financial statements for the month of January 2002



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

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22 March 2002 12/2002

COMMONWEALTH GOVERNMENT MONTHLY FINANCIAL STATEMENTS

FOR THE MONTH OF JANUARY 2002

KEY POINTS • The underlying cash balance for the year to date 31 January 2002 was a deficit of $9,077 million.

• The fiscal balance for the year to date 31 January 2002 was a deficit of $7,903 million.

• The net operating result for the year to date 31 January 2002 was a deficit of $7,235 million.

FISCAL AND FINANCIAL OUTCOMES

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

AGGREGATES

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

Under lying Cash Balance -2,921 -9,077 502

Fiscal Balance -2,996 -7,903 -3,073

R evenue (a) 12,696 90,752 165,750

Expenses (a) 15,958 97,987 169,613

Net Oper ating Resul t -3,262 -7,235 -3,862

Assets 129,611 129,611 119,450

Liabilities 177,365 177,365 169,720

Net Assets (a) -47,754 -47,754 -50,270

* As published in the Mid-Year Economic and Fiscal Outlook 2001-2002.

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

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

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

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FISCAL OUTCOMES UNDERLYING CASH BALANCE

The underlying cash balance for the year to date 31 January 2002 was a deficit of $9,077m. The main components of the underlying cash balance are cash from operations and the net investment in non-financial assets.

The underlying cash balance is significantly lower than a pro-rata of the MYEFO estimate ($293m). The main factors contributing to the deficit are:

• significantly lower operating cash receipts as the majority of taxation receipts are received in the final months of the financial year;

• slightly higher personal benefit payments due to the movement of customers from annual payments through the tax system to Centrelink fortnightly payments; and

• higher grant payments in relation to some road programmes due to the nature of some grant agreements and the timing of payments in relation to a number of education grants.

Investing cash receipts are also lower than a pro-rata of the MYEFO estimate reflecting that the sale of some non financial assets are still to occur later in the financial year. The purchase of non financial assets is consistent with a pro rata of the MYEFO estimate.

FISCAL BALANCE

The fiscal balance for the year to date 31 January 2002 was a deficit of $7,903 million. The main components of the fiscal balance are the GFS net operating balance, which was a deficit of $8,015 million, and negative net capital investment of $112 million for the year to date 31 January 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 January 2002 was a deficit of $7,235m. This mainly reflects the revenue position, which is to build with taxation revenues received later in the financial year and the lumpiness in expenses such as employee expenses, personal benefits and grants.

REVENUES

Total revenue for the year to date 31 January 2002 was $90,752 million, comprising $80,895 million in taxation revenue and $9,857 million in non-tax revenue.

The main components in taxation revenue were PAYG(W) ($44,671 million, including residual payments of $33 million and $16 million from the now discontinued PAYE and Prescribed Payments Systems respectively), companies ($15,519 million) and excise duty ($11,781 million), and individuals refunds which reduced net revenue by ($8,672 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.

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

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EXPENSES

Total expenses for the year to date 31 January 2002 were $97,987 million, which is 1 per cent below a pro-rata of the Mid Year Economic and Fiscal Outlook (MYEFO) estimate of $98,941 million. Expenses for the year to date are not always directly comparable to full year estimates due to seasonal effects on Commonwealth administered expenses.

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

- Suppliers expenses for Defence are significantly lower as inventory consumption has been slowed earlier in the financial year while preparing for newly emerging operations and a lower budgeted expense as foreshadowed in Defence’s Additional Estimates Statements. (These expenses are primarily included in the Defence function.)

- Suppliers expenses being low due to measures announced at the time of the MYEFO update which may take effect later in the financial year. (These measures are in the Other Economic Affairs function).

- Expenses related to the net write down of assets being low as they do not occur regularly throughout the financial year. (These expenses are predominately in the Fuel and Energy functions).

- Grant expenses in relation to road programmes being low due to the nature of the grant arrangements. (These grant expenses are in the Transport and Communication function).

- Some grant expenses being low due to the cyclical nature of payments or the timing of agreements. (The large proportion of these grants are in the Education, General Public Services, and Mining and Mineral Resources (other than fuels), Manufacturing and Construction functions).

Offset by:

- Higher employee expenses due to actuarial assessments. (These employee expenses are in the General Public Services and the Notional Superannuation Interest functions).

- Some personal benefit expenses being higher due to movements in average entitlements and customer numbers mainly for the Family Tax Benefits. Family Tax Benefit recipients have predominantly claimed payment through Centrelink rather than through the Australian Taxation Office. (These personal benefit expenses are in the Social Security and Welfare function).

- Some grant expenses being higher as the funding for research programmes to higher education institutions are recognised on a calendar year basis. (The grant expenses are in the General Public Services function).

ASSETS AND LIABILITIES

The net asset balance within the General Government sector has weakened from a negative net asset position of $46,305 million at 30 June 2001 to a negative net asset position of $47,754 million at 31 January 2002. This was primarily the result of a reduction in investments.

Nick Minchin I J Watt

Minister for Finance Secretary to the Department of

and Administration Finance and Administration

22 March 2002

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

22 March 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 ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

Note $m $m $m

Revenues Taxation Income tax 1 8,895 62,635 118,885

Indirect tax 2 2,199 15,192 24,472

Fringe Benefits Tax 1 638 2,365 3,440

Other taxes 144 702 1,378

Total Taxation Revenue 11,876 80,895 148,175

Non-Taxation Sales of goods and services 350 2,296 2,924

Interest and dividends 282 5,772 8,270

Net foreign exchange g ains -54 43 0

Net gains from sales of assets 2 100 2,689

Other sources of non-tax revenue 240 1,647 3,693

Total Non-Tax Revenue 820 9,857 17,575

Total Revenues 12,696 90,752 165,750

Expenses Goods and Services Employees 2,397 11,498 18,377

Suppliers 1,034 6,982 13,863

Depreciation and amortisation 279 1,875 3,529

Net w rite dow n of assets 132 955 3,901

Net foreign exchange losses -4 1 111

Net losses from the sale of assets 2 12 4

Other goods and services expenses 535 3,294 5,759

Total Goods and Ser vices 4,376 24,617 45,542

Subsidies Benefits and Grants Personal benefits 6,262 43,042 73,375

Subsidies 639 4,374 7,501

Grants 4,039 21,524 35,806

Total Subsidies Benefits and Gr ants 10,939 68,940 116,682

Interest and Other Interest 639 4,399 7,352

Other financing costs 4 32 36

Total Inter est and other 643 4,430 7,388

Total Expenses 15,958 97,987 169,613

Operating Result -3,262 -7,235 -3,862

Extraordinary items 0 0 0

-3,262 -7,235 -3,862

This table is prepared on a AAS 31 basis * As published in the Mid-Year Economic and Fiscal Outlook 2001-2002.

Operating r esul t after extr aor dinary items

22 March 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* 31-Jan-02 30-Jun-01 30-Jun-02

$m $m $m

Assets Financial assets Cash 368 1,179 1,099

R eceivables 29,070 26,534 25,364

Investments 33,549 44,070 27,798

Accrued revenue 519 516 557

Other financial assets 48 36 16

Total financial assets 63,555 72,335 54,834

Non-financial assets Land and buildings 16,427 16,669 16,129

Infrastructure 42,564 41,955 42,298

Intangibles 1,047 1,052 1,316

Inventories 3,572 3,491 3,479

Other non-financial assets 2,446 1,538 1,394

Total non-financial assets 66,056 64,705 64,616

Total assets 129,611 137,040 119,450

Liabilities Debt Government securities 65,895 67,338 51,420

Loans 6,903 6,550 6,574

Leases 282 337 269

Deposits 270 293 293

Other debt 4,268 5,154 4,173

Total debt 77,620 79,672 62,729

Provisions and payables Employees 86,898 85,172 87,254

Suppliers 1,381 1,712 2,020

Personal benefits payable 1,849 2,458 2,899

Subsidies payable 207 252 231

Grants payable 2,894 8,247 8,603

Other provisions and payables 6,516 5,832 5,984

Total pr ovisions and payables 99,745 103,673 106,992

Total liabil ities 177,365 183,345 169,720

Net Assets (a) -47,754 -46,305 -50,270

Equity Accumulated results -88,431 -81,241 -84,497

R eserves 40,677 34,936 34,227

Capital 0 0 0

Total equity -47,754 -46,305 -50,270

(a) Opening net assets -46,305 -52,890 -46,305

Operating result after extraordinary items -7,235 1,531 -3,862

Asset revaluation reserve -67 2,239 108

Other movements 5,853 2,815 -211

Closing net assets -47,754 -46,305 -50,270

This table is prepared on a AAS 31 basis # As published in the Consolidated Financial Statements for the year ended 30 June 2001. * As published in the Mid-Year Economic and Fiscal Outlook 2001-2002.

22 March 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 ACTUAL E STIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FUL L YE AR*

$m $m $m

Oper ating Activities Cash received Taxes 12,295 78,583 148,662

Sales of goods and services 391 2,286 2,919

Interest 239 1,951 3,378

Dividends 1 3,665 4,783

GST receipts related to purchases/sales 57 1,005 1,842

Other 113 1,598 3,261

Total oper ating cash r eceived 13,096 89,088 164,844

Cash used Payments to employees 1,587 9,752 16,289

Payments to suppliers 1,142 8,097 15,129

Subsidies paid 605 4,755 7,540

Personal benefits 7,138 43,609 72,990

Grant payments 4,036 21,897 35,467

Interest and other financing costs 486 4,172 7,272

GST payments related to purchases/sales 36 98 102

Other (a) 656 3,280 5,596

Total oper ating cash used 15,686 95,660 160,385

Net Cash fr om Oper ating Activities -2,590 -6,572 4,460

Investing Activities Net Cash received/(used) Proceeds from asset sales program 0 21 3,336

Proceeds from sales of property, plant and equipment and intangibles 56 386 1,073

Net loans, advances and HECS 66 -164 -35

Purchase of property, plant and equipment and intangibles -437 -2,899 -4,968

Other investing cash receipts/(payments) 3,525 10,377 -326

Net Cash fr om Investing Activities 3,210 7,721 -920

Financing Activities Net Cash received/(used) Net repayments of borrow ings -2,234 -1,091 -2,495

Other financing cash receipts/(payments) -179 -869 -1,050

Net cash fr om Financing Activities -2,413 -1,960 -3,545

Net incr ease / (decr ease) in cash hel d -1,793 -811 -5

This table is prepared on a AAS 31 basis * As published in the Mid-Year Economic and Fiscal Outlook 2001-2002.

(a) Includes GST receipts/payments related to purchase/sales.

22 March 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 ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

Revenues by Sour ce Taxation 11,876 80,895 148,175

Non-taxation 820 9,857 17,575

Total r evenues 12,696 90,752 165,750

Expenses by P ur pose General Public Services 1,543 7,882 11,024

Defence 895 6,267 11,980

Public Order and Safety 141 1,162 1,744

Education 1,867 6,613 12,047

Health 2,417 15,883 27,327

Social Security and W elfare 5,774 40,307 69,170

Housing and Community Amenities 243 1,240 2,030

R ecreation and Culture 160 1,323 2,098

Fuel and Energy 276 1,845 5,342

Agriculture, Forestry and Fishing 164 1,050 1,887

Mining and Mineral Resources (other than fuels); Manufacturing and Construction 10 516 1,097

Transport and Communication 58 1,210 2,815

Other Economic Affairs 308 2,022 4,053

Other Purposes Public Debt Interest 613 4,265 7,156

Nominal Superannuation Interest 944 3,127 4,847

General Purpose Inter-Government Transactions 545 3,205 5,555

Natural Disaster R elief 0 51 101

Contingency R eserve 0 0 -702

Asset Sales 0 19 42

Total Expenses 15,958 97,987 169,613

Oper ating Resul t -3,262 -7,235 -3,862

This table is prepared on a AAS 31 basis * Data is this table is consistent w ith that published in Table 19 of the Mid-Year Economic and Fiscal Outlook 2001-02.

22 March 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

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

AAS31 Operating result -3,262 -7,235 -3,862

plus revaluations / w ritedow ns from superannuation 0 0 0

plus w ritedow n of assets/bad and doubtful debts 132 955 3,901

less mutually agreed w ritedow ns 29 175 200

plus net foreign exchange losses 50 -42 111

plus other economic revaluations (a) -128 -529 -183

less profit (loss) on the sale of assets 0 88 2,685

less cost of asset sales 0 0 0

plus Defence w eapons platform depreciation 135 966 1,980

less Defence w eapons platform investment (b) -178 1,867 2,916

less reversal of interest capitalisation 0 0 31

GFS Net Operating Balance -2,924 -8,015 -3,886

less purchase of property plant and equipment and intangibles 65 2,821 4,908

less net assets acquired under finance leases -5 -32 -71

less other non-financial assets 1 97 -133

less increase in inventories 32 138 -12

plus proceeds from sales of property, plant and equipment 56 361 1,009

plus Defence w eapons platform investment (b) -178 1,867 2,916

plus depreciation and amortisation excl w eapons 143 908 1,549

plus reversal of interest capitalisation 0 0 31

Fiscal Balance (GFS Net Lending) -2,996 -7,903 -3,073

* Data in this table are consistent w ith that published in the Mid-Year Economic and Fiscal Outlook 2001-02. (a) Net repurchase premia (accruals basis) and net losses/gains on sw ap transactions are included in this item. (b) Defence w eapons platform investment w as overstated by approximately $200m in December 2001 resulting in an adjusting balance in January 2002.

COMMONWEALTH GENERAL GOVERNMENT SECTOR - DERIVATION OF UNDERLYING CASH BALANCE

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

Net cash from operating activities -2,590 -6,572 4,460

Plus: Paym ents classified as GFS adjustments 45 -24 -133

Plus: Net cash from investm ents in non-financial assets Proceeds from sales of property, plant and equipment and intangibles 56 386 1,073

Less: Purchase of property, plant and equipment and intangibles 437 2,899 4,968

Less: Finance leases and sim ilar arrangem ents -5 -32 -71

Underl ying Cash Balance -2,921 -9,077 502

* Data in this table are consistent w ith that published in the Mid-Year Economic and Fiscal Outlook 2001-02.

22 March 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: Other withholding tax, 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

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

INDIVIDUALS Gross PAYG w ithholding (a)(b) 4,565 44,671 79,000

Gross other individuals (c) 775 7,116 15,510

Less refunds 511 8,672 10,700

Total income tax on individuals 4,829 43,115 83,810

OTHER SOUR CES Companies 3,069 15,519 27,085

Superannuation funds (d) 589 2,971 4,560

Other w ithholding tax 0 9 1,980

Petroleum Resource R ent Tax 409 1,021 1,450

Total income tax fr om other sour ces 4,067 19,520 35,075

Total income tax 8,895 62,635 118,885

Fr inge Benefits tax 638 2,365 3,440

* As published in the Mid-Year Economic and Fiscal Outlook 2001-2002.

(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) Amounts w ithheld for failure to quote a Tax File Number (TFN) or an Australian Business Number (ABN) are included in Gross PAYG w ithholding. (c) Includes individuals making PAYG instalment payments. (d) Includes superannuation contributions surcharge.

NOTE 2: INDIRECT TAX

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

Excise duty 1,535 11,781 19,050

Customs duty 566 2,963 4,682

Other indirect tax 97 448 740

Total indir ect tax r evenue 2,199 15,192 24,472

* As published in the Mid-Year Economic and Fiscal Outlook 2001-2002.

22 March 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

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

JAN CUM ULATIVE YTD FULL YEAR*

$m $m $m

(collected on behalf of the States)

* As published in the Mid-Year Economic and Fiscal Outlook 2001-2002. (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.

27,580

GST R evenue (a)

1,290 15,435

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.