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Australian Government Monthly Financial Statements: February 2007



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Senator the Hon Nick Minchin

Minister for Finance and Administration Leader of the Government in the Senate

Media Release

27/2007 20 April 2007

AUSTRALIAN GOVERNMENT MONTHLY FINANCIAL STATEMENTS

February 2007

KEY POINTS

z The underlying cash balance for the 2006-07 year to 28 February 2007 was a surplus of

$5,077 million.

z The fiscal balance for the 2006-07 year to 28 February 2007 was a surplus of $3,623 million.

z The operating result for the 2006-07 year to 28 February 2007 was a surplus of $15,170

million.

These monthly financial statements are produced from financial data prepared under the Australian Equivalents to International Financial Reporting Standards (AEIFRS). Care needs to be taken when comparing monthly or cumulative data across years and to full year estimates. Revenues and

expenses do vary from month-to-month. The accrual framework including 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.

FISCAL OUTCOMES

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

The underlying cash balance for the year to 28 February 2007 was a surplus of $5,077 million. This underlying cash balance is $2,807 million lower than the February 2007 pro rata (a surplus of $7,885 million) of the Mid Year Economic and Fiscal Outlook (MYEFO) Revised Budget estimate for 2006-07 of $11,827 million. The difference reflects a number of individual variations including the following:

Movements in underlying cash receipts:

Higher receipts from:

z Dividends;

Lower receipts from:

z Taxation in line with the usual monthly fluctuations in receipts.

Movements in underlying cash payments:

Higher payments for:

z Education Grants due to payments being made based upon the Ministerial determination thus

occurring on an irregular basis;

Lower payments for:

z Grants due to the seasonal nature of the timing of these payments.

Fiscal Balance

The fiscal balance for the year to 28 February 2007 was a surplus of $3,623 million. The main components of the fiscal balance are the GFS net operating balance, which was a surplus of $4,070 million, and a net capital reduction of $447 million for the year to 28 February 2007 (refer to the Reconciliation of the Operating Result to Fiscal Balance on page 8 for further detail).

FINANCIAL OUTCOMES

Actual expenses are $1,834 million higher when compared with a pro rata of the 2006-07 MYEFO Revised Budget estimate.

The main reason for the higher expenses is higher grant expenses across a variety of functions due to the seasonal nature and timing of these payments.

Assets and Liabilities

The net asset balance within the General Government sector is a positive net asset position of $1,120 million at 28 February 2007, including the impact of the accounting policy under AEIFRS which recognises the Australian Government’s obligation to the States and Territories upon the Education Minister’s determination which occurred in December 2006.

Contact:

Senator Minchin’s Office: Simon Troeth (02) 6277 7400

Department of Finance and Administration: Brett Kaufmann (02) 6215 3158 Acting First Assistant Secretary Financial Reporting and Cash Management

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR - INCOME STATEMENT

Nick Minchin Minister for Finance and Administration 20 April 2007

I J Watt Secretary to the Department of Finance and Administration 20 April 2007

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR - BALANCE SHEET

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR - STATEMENT OF CHANGES IN EQUITY

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR - CASH FLOW STATEMENT

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR - INCOME STATEMENT BY FUNCTION

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR - RECONCILIATION OF THE OPERATING RESULT TO FISCAL BALANCE

AUSTRALIAN GOVERNMENT GENERAL GOVERNMENT SECTOR DERIVATION OF UNDERLYING AND HEADLINE BALANCE

NOTES:

The accounting policies in this part are generally consistent with the requirements of AEIFRS. While the scope for financial reporting recommended by AEIFRS and AAS 31 is the whole of government (that is, the Australian Government public sector), the Financial Management and Accountability Act 1997 requires monthly financial statements to be consistent with the budget estimates. Accordingly and pursuant to the Charter of Budget Honesty Act 1998, this presentation covers the general government sector only. This publication does not include full note disclosures.

With the introduction of Business Activity Statements and Instalment Activity Statements in 2000-2001, 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 AEIFRS basis, unless otherwise indicated.

NOTE 1: INCOME TAX

NOTE 2: INDIRECT TAX

NOTE 3: GOODS AND SERVICES TAX

In regard to GST revenue, AAS would suggest the gross amount of GST be included in the Australian Government’s Financial Statements. However, the clear policy intent of the Intergovernmental Agreement on the Reform of Australian Government-State Financial Relations is that the GST is a

State tax collected by the Australian Government in an agency capacity. Therefore, accrued GST revenues and associated payments to the States and Territories are not recognised in these statements.

NOTE 4: ADJUSTMENT FOR EDUCATION GRANT EXPENDITURE

In regard to education grant expenditure, adherence to AAS results in fewer education expenses being reported until the signing of the Ministerial determination, which normally occurs between December and March each year. This produces a bunching of expenses such that the full year's expense is recognised at that time and remains relatively constant until June. The table below

provides details of the cash paid by DEST and attributable to the Education function for the year to date.

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)

2. 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 Australian Government Financial Statements, is given on the IMF's Data Dissemination Bulletin Board at http//dsbb.imf.org.

3. 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 AOFM website at http://www.aofm.gov.au/content/borrowing/commonwealth.asp? NavID=32. 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 Calender http://dsbb.imf.org.

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This page was last updated 20 April, 2007