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Budget Paper 1
Budget Statement 9
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The ABS is in the process of changing the GFS to an accrual framework, with the first accrual GFS data likely to be available in mid-1999. However, as consistent accruals data are not yet available for all jurisdictions, data in Part III of this statement (Trends in Non-financial Public Sector Cash Balances) are on a cash basis.
The underlying cash deficit measure used throughout this Statement is defined as cash
outlays minus cash revenue, adjusted for net advances. The latter comprise transactions in
financial assets undertaken for policy purposes -- ie net policy lending (new
policy loans and advances less repayments) and net equity transactions
(injections/purchases of equity less equity sales).
Prior to 1998-99, to maintain consistency with the net lending concept in the national
accounts, the measure of the general government sector cash underlying deficit used in
this Statement is not adjusted for increases in provisions. Subsequent to 1998-99, in line
with the System of National Accounts, 1993 (SNA93), the cash underlying deficit is
defined as underlying outlays minus revenue, minus net increase in provisions. For other
sectors increases in provisions have consistently been removed in line with the ABS
standard. This change mainly affects the data for the Commonwealth general government,
which makes significant provisions for Superannuation payments to the PTE sector.
Up until 1997-98 the ABS defined the deficit in headline terms (outlays less revenue less
increase in provisions). Since that time the ABS deficit has been defined in underlying
terms as outlays (excluding net advances) less revenue less increase in provisions. This
is achieved by reclassifying net advances from capital outlays to financing transactions.
Although an ABS headline deficit is no longer published, it can be readily derived from
published data.
The adjusted measure of Commonwealth general government cash own purpose outlays
used in this Statement comprises cash underlying outlays adjusted mainly to exclude
Commonwealth payments to the States other than specific purpose payments made `through'
the States. This differs from the ABS measure which excludes all payments to the States.
Specifically, the ABS measure excludes all payments to other levels of government and PTEs
and PFEs, such as general revenue assistance, specific purpose payments and advances and
subsidies, together with interest payments on borrowings undertaken on their behalf. The
adjusted measure adds back in to Commonwealth outlays specific purpose payments `through'
the States (other than those for local government purposes) as these payments are
generally not for State-like purposes. A corresponding adjustment is made to the
State/local series. The adjusted measure also removes State fiscal contributions from the
data on grants to the States.
The adjusted measures for both the Commonwealth and the State/local levels abstract from
all net advances. They are thus consistent with measures of the underlying deficit in, for
example, removing the impact of equity asset sales which would otherwise be included as
offsets to outlays.
Data used in this Statement recognises the recent changes made by the ABS to bring its
GFS reporting into line with SNA93.
From 1998-99 the State central borrowing authorities (CBAs) have been reclassified from
the general government sector to the public financial enterprise (PFE) sector. This change
recognises that, while CBAs continue to carry out financial intermediation activities on
behalf of the general government sector, their role is now broader and more commercial in
nature. In line with the new ABS classification, CBAs are excluded from general government
deficits and net debt presented in this Statement.
The reclassification of CBAs is being implemented as part of an extension of the scope of
GFS to include PFEs in order to provide a more complete coverage of the public sector.
This will ensure that CBAs remain within GFS. It will also make GFS consistent in scope
with the new accounting standard for the whole of government accounts (AAS31). However the
analysis of the public sector in this Statement excludes PFEs, in line with current Uniform
Presentation Framework reporting requirements.
The 1998-99 Government Financial Estimates publication (Cat. No. 5501.0) also saw
the reclassification of regulatory fees and other fines out of the broader taxes, fees and
fines category used in previous years. Regulatory fees were reclassified as user charges,
thereby reducing taxes and general government final consumption expenditure. Fines were
placed into other current revenue, effectively reducing taxes and increasing other
revenue.
