Underlying Cash Balance

The underlying cash balance is a cash measure that shows whether the Government has to borrow from financial markets to covers its activities.

A difference to the fiscal balance arises because of the Government’s decision to report the underlying cash balance net of Future Fund earnings from the 2005-06 Budget onwards as the earnings will be reinvested to meet future superannuation payments and are therefore not available for current spending.

The underlying cash balance is calculated as net cash receipts from operations (excluding Future Fund earnings), plus financing adjustments (to remove cash flows more appropriately viewed as financing in Government Financial Statistics), plus net cash capital investment (net cash investment in non-financial assets) as such investment is integral to the operation of Government. A deficit for example, indicates that the Australian Government has to borrow from other sectors or run down its cash reserves. The underlying cash balance is thus a cash indicator of the financial impact of the Australian Government’s operations on the rest of the economy.

A link to a diagram outlining the calculation of the underlying cash balance is provided below.

Back to top

Contact for information on this page: Financial Reporting and Accounting Policy Contacts