Document Index Budget Paper 1 Budget Statement 1

Appendix B: Provisions

The Government still makes superannuation payments to current and former employees of PTEs who were once employees within the general government sector. These payments are termed 'provisions' and to date have been treated as financing transactions, and as such did not impact on the budget 'bottom line' balance. This was consistent with their treatment by the ABS in the Australian National Accounts.

The ABS has recently adopted revised international statistical standards (SNA 93) in the Australian National Accounts. As part of these new standards 'provisions' are brought 'above the line'. To maintain consistency with this revised ABS treatment, from the 1999-2000 Budget provisions will now be brought `on budget', like other superannuation payments, and included in budget bottom lines. This classification change will have the effect of reducing the headline and underlying cash balance by around $1¼ billion per annum.

The Government has always published budget bottom lines inclusive of provisions in GFS tables. From the 1999-2000 Budget the GFS cash balance will align with the underlying cash balance (refer to Statement 9).

Under accruals, for the calculation of fiscal balance, the relevant expense is a measure of the accruing interest or growth on the outstanding PTE superannuation liability. As a consequence of timing differences, the accrual expense is expected to be less than the cash outlays in respect of this liability.