Part C
agency additional estimates statements
Department of the Treasury
Section 3: Budgeted
financial statements
Analysis of budgeted financial statements
A brief analysis of the Department’s budgeted financial statements is provided below.
Departmental
Total revenue is expected to remain similar to 2002-03, although there are movements between the types of revenue received by Treasury. These movements include an increase in goods and services revenue in 2003-04, reduced interest revenue due to the cessation of the Agency Banking Incentive Scheme and reduced appropriations.
The Department’s capital budget reflects increased capital appropriations in 2003-04. This is attributable to budget measures relating to additional capital acquisitions for the Royal Australian Mint, an equity injection to the Australian Reinsurance Pool Corporation (to be repaid in the same year) and the implementation of the Budget Estimates and Framework Review.
Administered
Goods and services tax (GST) related items are treated as negative in the Department of the Treasury’s administered budget statements.
For constitutional reasons the GST is levied by the Commonwealth, and can therefore be technically considered Commonwealth revenue under the reporting standards. The clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations (the IGA), however, is that it is a State tax collected by the Commonwealth in an agency capacity. Accordingly, GST related items are treated as negative in Treasury’s administered budget statements. This fully offsets GST related items recorded by the Australian Taxation Office so that at a consolidated level the GST is not recorded by the Commonwealth.
Departmental financial statements
Budgeted departmental statement of financial performance
This statement provides a picture of the expected financial results for the Department of the Treasury by identifying full accrual expenses and revenues, which highlights whether the Department is operating at a sustainable level.
Budgeted departmental statement of financial position
This statement shows the financial position of the Department of the Treasury. It helps decision-makers to track the management of assets and liabilities.
Budgeted departmental statement of cash flows
Budgeted cash flows, as reflected in the statement of cash flows, provide important information on the extent and nature of cash flows by categorising them into expected cash flows from operating activities, investing activities and financing activities.
Departmental capital budget statement
Shows all planned departmental capital expenditure (capital expenditure on non-financial assets), whether funded through capital appropriations for additional equity or borrowings, or from funds from internal sources.
Departmental non-financial assets — summary of movement
Shows budgeted acquisitions and disposals of non-financial assets during the budget year.
Notes of administered activity
Note of budgeted administered financial performance
This note identifies the main revenues and expenses administered on behalf of the Government.
Note of budgeted administered financial position
This note shows the assets and liabilities administered on behalf of the Government.
Note of budgeted administered cash flows
This note shows cash flows administered on behalf of the Government.
Note of administered capital budget statement
This note shows details of planned administered capital expenditure.
Table 3.1: Budgeted Departmental Statement of
Financial Performance
(for the period ended 30 June)
Table 3.2: Budgeted Departmental Statement of
Financial Position
(for the period ended 30 June)
Table 3.3: Budgeted Departmental Statement of
Cash Flows
(for the period ended 30 June)
Table 3.4: Departmental Capital Budget Statement
Table 3.5: Departmental Non-financial Assets — Summary of Movement (Budget year 2003-04)
Table 3.6: Note of Budgeted Financial Performance Administered on behalf of the Government (for the period ended 30 June)
Table 3.7: Note of Budgeted Financial Position Administered on behalf of the Government (as at 30 June)
Table 3.8: Note of Budgeted Administered Cash
Flows
(for the period ended 30 June)
Table 3.9: Note of Administered Capital Budget
Notes to the financial statements
Basis of accounting
The Department of the Treasury’s budget statements have been prepared on an accrual basis and in accordance with the goods and services tax (GST) accounting guidelines of the Urgent Issues Group (UIG) of the Australian Accounting Standards Board. The UIG consensus requires that expenses and assets be accounted for net of recoverable GST, revenues be accounted for net of GST payable and that cash flows and accounts payable and receivable be reported gross. Appropriations are thus net of recoverable GST amounts.
Departmental and administered financial statements
Under the Commonwealth’s accrual budgeting framework, and consistent with Australian Accounting Standards, transactions that departments control (departmental transactions) are separately budgeted for and reported on from transactions departments do not have control over (administered transactions). This ensures that departments are only held accountable for the transactions over which they have control.
Departmental assets, liabilities, revenues and expenses are those items that are controlled by the department. Departmental expenses include employee and supplier expenses and other administrative costs, which are incurred by the department in providing its goods and services.
Administered items are revenues, expenses, assets or liabilities which are managed by the department on behalf of the Government according to set Government directions. Administered expenses include subsidies, grants, and personal benefit payments and administered revenues include taxes, fees, fines and excises.
Detailed notes on the treatment of certain items can be found in the Treasury Annual Report 2002-03 (pages 172 to 186).
Royal Australian Mint
The Department of the Treasury’s departmental budget statements are aggregated to include the financial operations of the Royal Australian Mint (RAM). Any profit earned by RAM, taking into account working capital requirements, is returned to the Commonwealth.
Seigniorage is collected by RAM on behalf of the Commonwealth. Seigniorage represents the difference between the face value of coinage sold to the Reserve Bank of Australia and its cost of production to RAM. Seigniorage is treated as an administered item within the Department of the Treasury budget statements.