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Media Release
Senator the Hon Penny Wong
Minister for Finance and Deregulation

05/2011
11 February 2011

Australian Government Monthly Financial Statements
December 2010

KEY POINTS

• The underlying cash balance for the 2010-11 year to 31 December 2010 was a deficit of $36,681 million.
• The fiscal balance for the 2010-11 year to 31 December 2010 was a deficit of $34,145 million.

*As published in the 2010-11 MYEFO.
(a) Excludes Future Fund earnings.
(b) Net worth is calculated as total assets minus total liabilities.
(c) Net debt equals the sum of deposits held, government securities, loans and other borrowing, minus the sum of cash and deposits, advance paid, and investments, loans and placements.

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 2010 was a deficit of $36,681 million, compared to the 2010-11 Mid Year Economic and Fiscal Outlook (MYEFO) estimate profile underlying cash balance deficit of $37,438 million.

Fiscal Balance

The fiscal balance for the year to 31 December 2010 was a deficit of $34,145 million. The MYEFO estimate profile of the fiscal balance for 2010-11 is a deficit of $35,314 million. The difference of $1,170 million primarily relates to lower grant payments, lower net acquisition of non-financial assets and lower revenue.

FINANCIAL OUTCOMES

Revenues and Expenses

Revenues are $1,040 million lower than the MYEFO estimate profile for 2010-11 due to lower taxation revenue and interest income.

Expenses are $643 million lower when compared with MYEFO estimate profile for 2010-11 due lower than anticipated grant payments to States and Territories.

Assets and Liabilities

The net worth balance of the General Government sector is a negative net asset position of $73,685 million at 31 December 2010.

Australian Government General Government Sector – INCOME STATEMENT

*As published in the 2010-11 MYEFO.
(a) Consistent with ABS GFS classification, other employee related expenses are reported under other operating expenses. Total employee expenses equal wages and salaries plus other operating expenses.
(b) Reflects changes in the market valuation of investments and any 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 2010-11 MYEFO.
(a) Net worth is calculated as total assets minus total liabilities.
(b) Net financial worth equals total financial assets minus total liabilities.
(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, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid, and investments, loans and placements.

Australian Government General Government Sector - CASH FLOW STATEMENT

*As published in the 2010-11 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 2010-11 MYEFO.

NOTES:

The Australian Government monthly financial statements for 2010-11 have been prepared on a basis consistent with the 2010-11 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 are limited to complying with either ABS GFS or AAS.

In response to the report titled ‘Review of Operation Sunlight: Overhauling Budgetary Transparency’, the Australian Government has improved the transparency and accountability of the Monthly Financial Statements (MFS) by reporting against a profile of expected revenue and expenses. This allows for a more accurate commentary and account for seasonality or patterns of revenue and expenses.

The Government is committed to releasing the MFS 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.

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 2010-11 MYEFO.

Note 2: Indirect Tax

*As published in the 2010-11 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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