Document Index Budget Paper 1 Budget Statement 9

Part I: Introduction

Statement 9 examines trends in the finances of the Commonwealth and State/local levels of government, providing a broader context in which to consider developments in the Commonwealth's budget. Part II of this Statement looks specifically at the Commonwealth Government within an accruals framework, considering non-financial public sector fiscal balance and liabilities. The remainder of the Statement considers all levels of government: Part III examines trends in underlying deficits, outlays and revenue, while Part IV discusses movements in net debt.

This budget has seen the Commonwealth move to accrual based reporting. Consequently, the current and out-year Commonwealth cash data in this statement is now derived from accruals figures, rather than collated directly. Thus there is effectively a break in the series between outcome data up to and including 1997-98, and estimates and projections from 1998-99 onwards.

The Statement uses Australian Bureau of Statistics (ABS) Government Finance Statistics (GFS) classifications of the non-financial public sector, which provide a consistent basis for comparison. Data are presented both by level of government and institutional sector. The former refers to the distinction between the Commonwealth and the State/local levels while the latter distinguishes between the general government sector and the public trading enterprise (PTE) sector within each main level of government.

• The general government sector, through government departments and agencies, provides public services which are mainly non-market in nature, are mainly for the collective consumption of the community, or involve the transfer or redistribution of income. These services are financed mainly through taxes and other compulsory levies, although user charging and external funding have increased in recent years.
• The PTE sector comprises bodies which provide goods and services that are mainly market, non-regulatory and non-financial in nature, financed mainly through sales to the consumers of these goods and services. In general, PTEs are legally distinguishable from the governments which own them.
• Together the general government sector and the PTE sector comprise the non-financial public sector.

In order to provide a more complete coverage of the public sector, from 1998-99 the ABS has extended the scope of GFS to include public financial enterprises (PFEs). The PFE sector has been shrinking in recent years with the privatisation of government owned banks and insurance offices, but it still comprises entities such as State home and rural finance schemes, the Reserve Bank of Australia and State central borrowing authorities. Pending a review of the Uniform Presentation Framework[1] reporting requirements, this sector is excluded from the analysis in Statement 9, which continues to report on a non-financial public sector basis.

Appendix A outlines the size and structure of the non-financial public sector, including the respective roles of the Commonwealth and State/local governments. Appendix B provides cash data on revenue, outlays, underlying deficits, net interest outlays and net debt. Appendix C provides notes on the data used and developments in GFS, and on classification issues. Appendix D presents budget data on a basis consistent with the Uniform Presentation Framework (although in an abridged format), and also on an accrual GFS basis, and for the budget sector. Appendix E provides historical data and forward estimates for Commonwealth General Government underlying outlays, revenue, underlying balances and net debt.

[1] The Uniform Presentation Framework is an agreement between the Commonwealth, States and Territories that all jurisdictions publish a common core of financial information in their budget papers.