BP1ST2 - APPENDIX F: COMMONWEALTH GENERAL GOVERNMENT SECTOR

APPENDIX F: COMMONWEALTH GENERAL GOVERNMENT SECTOR

This appendix presents forward estimates of the underlying balance - and the revenue and outlays components - for the Commonwealth general government sector. The Commonwealth general government sector comprises both a budget and non-budget component. The budget sector, which dominates the general government sector, consists of those departments and agencies whose transactions are recorded on the Commonwealth Public Account (CPA). The non-budget sector includes Commonwealth government authorities such as the ABC and CSIRO, which operate outside the CPA through their own bank accounts. A more detailed description of these sectors can be found in Statement 7.

The estimates provided in Table F1 are based on GFS classification principles. However, as is the case in the budget sector, in order to provide an estimate of the underlying balance broadly consistent with the 'net lending' concept in the national accounts, no adjustment is made for increases in provisions. [18] As required by the Charter of Budget Honesty Bill 1996, general government estimates are also presented on a GFS consistent basis in Appendix D of Statement 7. A discussion of the GFS concepts and how these differ from the budget presentation is also provided in that appendix.

Table F1: Summary of General Government Aggregates ($m)

General government aggregates in Table F1 essentially mirror equivalent budget aggregates, although components of Commonwealth outlays can vary substantially between the general government and budget sectors. This reflects the elimination of transfers to the Commonwealth non-budget sector in the general government sector, and the inclusion in other outlay categories of spending by the non-budget sector. An economic type presentation of general government outlays and revenue is presented in Statement 7. Major differences to the equivalent budget sector presentation include:

higher final consumption expenditure in each year reflecting non-budget spending on goods and services;
higher personal benefit payments reflecting medicare and pharmaceutical benefits paid by the Health Insurance Commission (a non-budget authority); and
higher grants to other governments includes payments by the Australian National Training Authority (a non-budget authority).

Table F1 shows that the Commonwealth general government sector is expected to move from underlying deficit to underlying surplus from 1998-99, consistent with expected movements in the budget sector. This movement equates to a change from an underlying deficit of around ½ per cent of GDP to an underlying surplus of around ½ per cent of GDP. Compared with the general government estimates provided in the MYEFO, the move into underlying surplus is expected to occur one year earlier reflecting a stronger budget fiscal position.

The relative movements in the general government underlying and headline balance are dependent on changes in net advances. For instance, there is a larger increase in the headline surplus in 1997-98 compared to the fall in the underlying balance in the same year as a result of an increase in net advances in 1997-98 (mainly reflecting a higher level of equity asset sales).