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Commonwealth Government monthly financial statements for the month of May 2002



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

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19 July 2002 27/2002

COMMONWEALTH GOVERNMENT MONTHLY FINANCIAL STATEMENTS

FOR THE MONTH OF MAY 2002

KEY POINTS • The underlying cash balance for the year to date 31 May 2002 was a deficit of $3,002 million.

• The fiscal balance for the year to date 31 May 2002 was a deficit of $2,648 million.

• The net operating result for the year to date 31 May 2002 was a deficit of $1,943 million.

FISCAL AND FINANCIAL OUTCOMES

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

AGGREGATES

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

Underlying Cash Balance -715 -3,002 -1,193

Fiscal Balance -954 -2,648 -3,045

Headline Cash Balance -1,647 -3,808 -1,819

Revenue (a) 14,990 153,413 168,400

Expenses (a) 15,782 155,356 172,060

Net Operating Result -792 -1,943 -3,661

Assets 134,342 134,342 132,275

Liabilities 175,503 175,503 182,131

Net Assets (a) -41,161 -41,161 -49,855

* As published in the Budget Strategy and Outlook 2002-03.

(a) Revenue, 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

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

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FISCAL OUTCOMES UNDERLYING CASH BALANCE

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

The underlying cash balance for the year to date 31 May 2002 was a deficit of $3,002 million.

The underlying cash balance as at the end of May 2002 is lower than a pro-rata of the revised Budget estimate (which equals a deficit of $1,094 million). The main factors contributing to the difference are:

• lower taxation collections in May, while noting the final quarter overall is the strongest collection period for taxation receipts;

• higher grant payments due mainly to payments in relation to a number of education grants that are made at the commencement of the academic year; and

• higher subsidies payments relating to residential care prepayments.

Partially offset by

• lower personal benefits payments due to seasonal demand for Newstart;

• lower payments to suppliers reflecting seasonal patterns in Defence purchasing; and

• lower suppliers payments relating to large one off expenses such as the Tax Pack expected to be made in June.

Investing cash receipts are also lower than a pro-rata of the revised Budget estimate reflecting that the sale of some non-financial assets are to occur in June. This is partially offset by the lower level of purchases of property, plant and equipment by Defence and the construction of an immigration reception and processing centre on Christmas Island.

FISCAL BALANCE

The fiscal balance for the year to date 31 May 2002 was a deficit of $2,648 million. The main components of the fiscal balance are the GFS net operating balance, which was a deficit of $2,697 million, and negative net capital investment of $49 million for the year to date 31 May 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 May 2002 was a deficit of $1,943 million. The decline largely reflects lower taxation collections in the month of May, consistent with the seasonal trend of lower collections in the months between the submission of the quarterly Business Activity Statements.

REVENUES

Total revenue for the year to date 31 May 2002 was $153,413 million, comprising $137,517 million in taxation revenue and $15,896 million in non-tax revenue.

The main components in taxation revenue were Income Tax Withholding ($73,476 million, including residual payments of $55 million and $26 million from the now discontinued PAYE and Prescribed Payments Systems respectively), companies ($25,081 million) and excise duty ($18,065 million), and individuals refunds which reduced net revenue by ($10,204 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.

19 July 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 May 2002 were $155,356 million, which is 2 per cent below a pro-rata of the revised Budget estimate of $157,722 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:

• lower suppliers expenses reflecting seasonal patterns in Defence purchasing. Defence expect suppliers expenses to be consistent with the revised Budget estimate by the end of the financial year. Defence depreciation expenses are also lower but are expected to increase after end of year adjustments;

• lower suppliers expenses due to large one-off expenses such as the Tax Pack being incurred in the month of June;

• lower expenses relating to the corporatisation of the Snowy Mountains Hydro Electric Authority as was delayed from May to June;

• lower expenses relating to write down of bad and doubtful debts for personal benefits, as these are only adjusted annually, and the Student Financial Supplement Scheme which was delayed pending the results of an actuarial assessment; and

• lower personal benefits expenses due to seasonal demand for Newstart Allowance.

Offset by:

• higher grant expenses due mainly to:

− schools (Government and Non-Government), higher education and vocational education training as the funding is recognised on a calendar year basis; and

− majority of the payments in relation to Health Care Agreements have already been made.

• higher goods and services expense partly due to higher than estimated Child Support payments; and

• higher than estimated expenses in relation to the write down of non-financial assets by Defence.

ASSETS AND LIABILITIES

The net asset balance within the General Government sector has improved from a negative net asset position of $46,305 million at 30 June 2001 to a negative net asset position of $41,161 million at 31 May 2002.

Nick Minchin I J Watt

Minister for Finance Secretary to the Department of

and Administration Finance and Administration

19 July 2002

Contact: Senator Minchin’s Office: David Wawn (02) 6277 7400

Department of Finance and Administration: Jim Kerwin (02) 6215 3769

19 July 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

M AY CUM ULATIVE YTD FULL YEAR*

Note $m $m $m

Revenues Taxation Income tax 1 10,406 109,706 120,435

Indirect tax 2 2,264 23,076 24,864

Fringe Benefits Tax 1 310 3,570 3,630

Other taxes 133 1,165 1,335

Total Taxation Revenue 13,113 137,517 150,265

Non-Taxation Sales of goods and services 345 3,324 3,865

Interest and dividends 261 7,809 8,501

Net foreign exchange gains 529 1,280 646

Net gains from sales of assets 11 69 2,424

Other sources of non-tax revenue 731 3,414 2,699

Total Non-Tax Revenue 1,877 15,896 18,135

Total Revenues 14,990 153,413 168,400

Expenses Goods and Services Employees 1,635 17,870 19,440

Suppliers 1,419 11,718 13,259

Depreciation and amortisation 226 2,802 3,739

Net write down of assets 630 2,190 4,395

Net foreign exchange losses 39 90 0

Net losses from the sale of assets 0 19 8

Other goods and services expenses 613 5,240 5,562

Total Goods and Services 4,562 39,929 46,404

Subsidies Benefits and Grants Personal benefits 6,736 67,704 74,263

Subsidies 652 6,885 7,547

Grants 3,253 34,069 36,706

Total Subsidies Benefits and Grants 10,642 108,659 118,517

Interest and Other Interest 574 6,720 7,073

Other financing costs 4 48 67

Total Interest and other 579 6,769 7,140

Total Expenses 15,782 155,356 172,060

Operating Result -792 -1,943 -3,661

Extraordinary items 0 0 0

-792 -1,943 -3,661

This table is prepared on a AAS 31 basis * As published in the Budget Strategy and Outlook 2002-03.

Operating result after extraordinary items

19 July 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-M ay-02 30-Jun-01 30-Jun-02

$m $m $m

Assets Financial assets Cash 822 1,179 1,780

Receivables 29,970 26,534 30,785

Investments 36,201 44,070 34,370

Accrued revenue 632 516 524

Other financial assets 32 36 16

Total financial assets 67,657 72,335 67,475

Non-financial assets Land and buildings 16,999 16,669 16,471

Infrastructure 42,826 41,955 42,650

Intangibles 1,081 1,052 1,136

Inventories 3,768 3,491 3,350

Other non-financial assets 2,012 1,538 1,192

Total non-financial assets 66,685 64,705 64,800

Total assets 134,342 137,040 132,275

Liabilities Debt Government securities 63,834 67,338 64,045

Loans 6,595 6,550 6,403

Leases 237 337 258

Deposits 272 293 293

Other debt 3,204 5,154 3,774

Total debt 74,141 79,672 74,774

Provisions and payables Employees 88,203 85,172 88,509

Suppliers 1,850 1,712 1,193

Personal benefits payable 2,667 2,458 2,794

Subsidies payable 205 252 231

Grants payable 2,653 8,247 8,558

Other provisions and payables 5,783 5,832 6,072

Total provisions and payables 101,361 103,673 107,356

Total liabilities 175,503 183,345 182,131

Net Assets (a) -41,161 -46,305 -49,855

Equity Accumulated results -82,435 -81,241 -83,685

Reserves 41,274 34,936 33,829

Capital 0 0 0

Total equity -41,161 -46,305 -49,855

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

Operating result after extraordinary items -1,943 1,531 -3,661

Asset revaluation reserve 928 2,239 191

Other movements 6,159 2,815 -81

Closing net assets -41,161 -46,305 -49,855

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 Budget Strategy and Outlook 2002-03.

19 July 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 ESTIM ATE

2001-2002 2001-2002 2001-2002

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

Operating Activities Cash received Taxes 12,808 134,052 148,740

Sales of goods and services 207 3,247 4,038

Interest 241 2,912 3,532

Dividends 4 4,709 4,760

GST receipts related to purchases/sales 205 1,839 2,145

Other 297 2,749 2,468

Total operating cash received 13,762 149,508 165,683

Cash used Payments to employees 1,313 14,772 16,097

Payments to suppliers 1,487 13,384 15,666

Subsidies paid 637 7,277 7,577

Personal benefits 6,443 67,665 73,976

Grant payments 2,960 33,732 36,146

Interest and other financing costs 591 6,915 7,122

GST payments related to purchases/sales 2 116 312

Other (a) 639 5,193 5,322

Total operating cash used 14,072 149,054 162,219

Net Cash from Operating Activities -310 454 3,464

Investing Activities Net Cash received/(used) Proceeds from asset sales program 0 244 567

Proceeds from sales of property, plant and equipment and intangibles 68 655 853

Net loans, advances and HECS -912 -824 -946

Purchase of property, plant and equipment and intangibles -356 -3,979 -5,331

Other investing cash receipts/(payments) -10 7,444 6,327

Net Cash from Investing Activities -1,210 3,540 1,470

Financing Activities Net Cash received/(used) Net repayments of borrowings 835 -3,460 -3,440

Other financing cash receipts/(payments) 45 -890 -827

Net cash from Financing Activities 880 -4,350 -4,268

Net increase / (decrease) in cash held -640 -356 666

This table is prepared on a AAS 31 basis * As published in the Budget Strategy and Outlook 2002-03.

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

19 July 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 BY FUNCTION

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

Revenues by Source Taxation 13,113 137,517 150,265

Non-taxation 1,877 15,896 18,135

Total revenues 14,990 153,413 168,400

Expenses by Purpose General Public Services 1,066 11,654 11,639

Defence 1,527 10,556 11,637

Public Order and Safety 293 1,747 1,862

Education 891 10,831 11,996

Health 2,542 24,975 27,127

Social Security and Welfare 6,229 63,475 69,864

Housing and Community Amenities 183 2,033 2,206

Recreation and Culture 215 1,820 2,042

Fuel and Energy 268 2,893 5,526

Agriculture, Forestry and Fishing 181 1,570 1,797

Mining and Mineral Resources (other than fuels); Manufacturing and Construction 116 914 1,167

Transport and Communication 272 2,289 2,872

Other Economic Affairs 360 3,670 4,155

Other Purposes Public Debt Interest 558 6,485 6,953

Nominal Superannuation Interest 385 4,849 5,239

General Purpose Inter-Government Transactions 685 5,508 5,993

Natural Disaster Relief 12 67 108

Contingency Reserve 0 0 -141

Asset Sales 0 22 19

Total Expenses 15,782 155,356 172,060

Operating Result -792 -1,943 -3,661

This table is prepared on a AAS 31 basis * Data in this table are consistent w ith that published in Table 3 Statement 6 of the Budget Strategy and Outlook 2002-03.

19 July 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

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

AAS31 Operating result -792 -1,943 -3,661

less assets recognised for the first time 0 0 8

plus revaluations / w ritedowns from superannuation 652 652 0

plus writedown of assets/bad and doubtful debts 630 2,190 4,395

less mutually agreed writedowns 106 443 280

plus net foreign exchange losses -490 -1,190 -646

plus other economic revaluations (a) -619 -1,053 101

less profit (loss) on the sale of assets 11 50 2,416

less cost of asset sales -1 7 29

plus Defence weapons platform depreciation 137 1,512 1,980

less Defence weapons platform investment 88 2,365 3,000

less reversal of interest capitalisation 0 0 31

GFS Net Operating Balance -686 -2,697 -3,595

less purchase of property plant and equipment and intangibles 450 3,892 5,401

less net assets acquired under finance leases -14 -70 -83

less other non-financial assets 21 191 -78

less increase in inventories 55 173 -140

plus proceeds from sales of property, plant and equipment 67 580 860

plus Defence weapons platform investment 88 2,365 3,000

plus depreciation and amortisation excl weapons 89 1,290 1,759

plus reversal of interest capitalisation 0 0 31

Fiscal Balance (GFS Net Lending) -954 -2,648 -3,045

* Data in this table are consistent w ith that published in the Budget Strategy and Outlook 2002-03. (a) Net repurchase premia (accruals basis) and net losses/gains on swap transactions are included in this item.

COMMONWEALTH GENERAL GOVERNMENT SECTOR - DERIVATION OF UNDERLYING AND HEADLINE BALANCE

ACTUAL ACTUAL ESTIM ATE

2001-2002 2001-2002 2001-2002

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

Net cash from operating activities -310 454 3,464

Plus: Payments classified as GFS adjustments -73 -202 -262

Plus: Net cash from investments in non-financial assets Proceeds from sales of property, plant and equipment and intangibles 68 655 853

Less: Purchase of property, plant and equipment and intangibles 414 3,979 5,331

Less: Finance leases and similar arrangements -14 -70 -83

Underlying Cash Balance -715 -3,002 -1,193

Plus: Net Advances Proceeds from asset sales program 0 244 567

Net advance receipts/(payments) (a) -932 -1,050 -1,193

Equals Headline Cash Balance -1,647 -3,808 -1,819

* Data in this table are consistent with that published in the Budget Strategy and Outlook 2002-03. (a) Includes transactions classified as net advances for GFS purposes.

19 July 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

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

INDIVIDUALS AND OTHER WITHHOLDING TAX Gross income tax withholding (a)(b) 7,491 73,476 80,940

Gross other individuals (c) 2,591 15,977 16,725

Less refunds 522 10,204 10,350

Total individuals and other withholding tax 9,560 79,249 87,315 OTHER SOURCES Companies 802 25,081 27,480

Superannuation funds (d) 44 4,071 4,280

Petroleum Resource Rent Tax 0 1,305 1,360

Total income tax from other sources 847 30,458 33,120

Total income tax 10,406 109,706 120,435

Fringe Benefits tax 310 3,570 3,630

* As published in the Budget Strategy and Outlook 2002-03.

(a) The Pay As You Go (PAYG) system was introduced generally from 1 July 2000. It includes revenue from taxpayers who were previously subject to PAYE w ithholding arrangements, or who were in the PPS and will now be subject to PAYG withholding arrangements from 1 July 2000.

(b) Previously reported as Pay As You Go (Withholding) and other withholding. Other withholding was previously reported under other sources of income tax, and includes amounts withheld for failure to quote a Tax File Number or an Australian Business Number, interest, dividends and royalty payments to non-residents, and payments to aboriginal groups for the use of land for mineral exploration and mining.

(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

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

Excise duty 1,514 18,065 19,500

Customs duty 678 4,292 4,604

Other indirect tax 71 718 760

Total indirect tax revenue 2,264 23,076 24,864

* As published in the Budget Strategy and Outlook 2002-03.

19 July 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

M AY CUM ULATIVE YTD FULL YEAR*

$m $m $m

(collected on behalf of the States)

* As published in the Budget Strategy and Outlook 2002-03. (a) GST revenue is presented in this note on an accrual basis. This differs slightly from GST cash receipts, on which payments to the States and Territories are based.

27,630

GST Revenue (a)

1,443 25,628

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.