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Media Release
The Hon Lindsay Tanner MP
Minister for Finance and Deregulation

03/2010
5 February 2010

Australian Government Monthly Financial Statements
December 2009

KEY POINTS

• The underlying cash balance for the 2009-10 year to 31 December 2009 was a deficit of $32,883 million.
• The fiscal balance for the 2009-10 year to 31 December 2009 was a deficit of $23,522 million.

*As published in the 2009-10 MYEFO.

The Australian Government monthly financial statements for 2009-10 have been prepared on a basis consistent with 2009-10 Budget as required under section 54 of the Financial Management and Accountability Act 1997. The statements are based on the Australian Bureau of Statistics (ABS) Government Finance Statistics (GFS) except where Australian Accounting Standards (AAS) provide a better conceptual treatment for specific items. Departures will be limited to complying with either ABS GFS or AAS.

The Australian Government has improved the transparency and accountability of the monthly financial statements by reporting against a profile of expected revenue and expenses. The outcomes of the monthly financial statements will be compared to this profile allowing for a more accurate commentary and account for seasonality or patterns of revenue and expenses. This improvement to the monthly financial statements is in response to the report titled ‘Review of Operation Sunlight: Overhauling Budgetary Transparency’.

The Government is committed to releasing the monthly financial statements in a timely fashion and will endeavour to do so in accordance with International Monetary Fund (IMF) Special Data Dissemination Standards. Under these standards the timeframe for releasing the MFS is by the end of the following month. The exception is the July MFS, for which the IMF has given Australia special dispensation to release before 30 September.

Care needs to be taken when comparing monthly or cumulative data across years and to full year estimates. Revenues and expenses 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 underlying cash balance includes cash from operations and net cash provided by investing activities in non-financial assets but excludes the cash earnings for the Future Fund.

The underlying cash balance for the year to 31 December 2009 was a deficit of $32,883 million. The difference between the Mid-Year Economic and Fiscal Outlook (MYEFO) profile estimate underlying cash balance deficit of $39,579 million primarily reflects the timing of taxation receipts and grant payments.

Fiscal Balance

The fiscal balance for the year to 31 December 2009 was a deficit of $23,522 million. The MYEFO profile estimate of the fiscal balance for 2009-10 is a deficit of $33,130 million.

FINANCIAL OUTCOMES

Revenues and Expenses

Revenues are $2,836 million higher and expenses are $6,376 million lower when compared with the MYEFO profile estimate for 2009-10.

The main driver of lower expenses is grants and goods and services expense, whilst higher revenues are primarily attributable to tax revenue.

Assets and Liabilities

The net worth balance of the General Government sector is a positive net asset position of $1,929 million at 31 December 2009.

Australian Government General Government Sector – INCOME STATEMENT

*As published in the 2009-10 MYEFO.
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other operating expenses.
(b) Revaluations of equity reflects changes in the market valuation of investments. This line also reflects any equity revaluations at the point of disposal or sale.
(c) Largely reflects other revaluation of assets and liabilities.
(d) The term fiscal balance is not used by the ABS.

Australian Government General Government Sector - BALANCE SHEET

*As published in the 2009-10 MYEFO.
(a) Net worth is calculated as total assets minus total liabilities.
(b) Net financial worth equals total financial assets minus total liabilities. That is, it excludes non-financial assets.
(c) Net financial liabilities equals total liabilities less financial assets other than investments in other public sector entities.
(d) Net debt equals the sum of deposits held, advances received, government securities loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.
(e) The net debt estimates include the expected impact of the Future Fund rebalancing its portfolio allocation by increasing its holding of equities, which are not included in the calculation of net debt.

Australian Government General Government Sector - CASH FLOW STATEMENT (a)

*As published in the 2009-10 MYEFO.
(a) A positive number denotes a cash inflow; a negative sign denotes a cash outflow.
(b) The acquisition of assets under finance leases decreases the underlying cash balance.The disposal of assets previously held under finance leases increases the underlying cash.
(c) The term underlying cash balance is not used by the ABS.

Australian Government General Government Sector - EXPENSES BY FUNCTION

*As published in the 2009-10 MYEFO.
(a) Asset sale related expenses are treated as a component of the contingency reserve.

NOTES:

The framework used as a basis for these statements and notes is generally consistent with the requirements of ABS GFS. 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 based on the same conceptual framework as the Budget i.e. the Australian Government’s interpretation of AASB 1049.

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 Business Activity 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 Income Statement.

Note 1: Income Tax

*As published in the 2009-10 MYEFO.
(a) Includes superannuation contributions surcharge.
(b) Negative collections indicate refunds exceed collections.

Note 2: Indirect Tax

*As published in the 2009-10 MYEFO.

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. 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. 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.

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