PAES 2004-2005 - Part C: Agency Additional Estimates Statements

Section 3: Budgeted financial statements

A brief analysis of the Treasury’s budgeted financial statements is provided below.

Departmental

The Treasury is budgeting towards a breakeven operating result for 2004-05.

The Treasury will have additional net revenues in 2004-05 of $13.3 million. This increase relates mainly to new funding provided to the Treasury for Budget measures (see Table 1.1) offset by reductions of $0.7 million from the transfer of the Consumer Safety and related Consumer Information functions to the Australian Competition and Consumer Commission and $0.06 million for an adjustment to the Comcover premium.

The Treasury will receive an additional $0.8 million in capital injections relating to new budget measures (see Table 1.3).

The Treasury has a sound financial position and currently has sufficient cash to fund ongoing provisions and payables, and asset replacements, as they fall due.

Administered

For constitutional reasons the goods and services tax (GST) is levied by the Australian Government, and can therefore be technically considered Australian Government revenue under the reporting standards. The clear policy intent of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations, however, is that GST is a State tax collected by the Australian Government in an agency capacity. Accordingly, GST related items recorded in the Treasury’s administered budget statements, fully offsets GST related items recorded by the Australian Taxation Office so that at a consolidated level the GST is not recorded by the Australian Government.

Departmental financial statements

Budgeted departmental statement of financial performance

This statement provides a picture of the expected financial results for the Treasury by identifying full accrual expenses and revenues, which indicates the sustainability of the Treasury’s finances.

Budgeted departmental statement of financial position

This statement shows the financial position 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 Australian Government.

Note of budgeted administered financial position

This note shows the assets and liabilities administered on behalf of the Australian Government.

Note of budgeted administered cash flows

This note shows cash flows administered on behalf of the Australian 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 3.1: Budgeted departmental statement of financial performance(for the period ended 30 June)

Table 3.2: Budgeted departmental statement of financial position
(as at 30 June)

Table 3.2: Budgeted departmental statement of financial position(as at 30 June)

(1) ‘Equity' is the residual interest in assets after deduction of liabilities.

Table 3.3: Budgeted departmental statement of cash flows
(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 2004-05)

Table 3.5: Departmental non-financial assets  Summary of movement (Budget year 2004-05)

Table 3.6: Note of budgeted financial performance administered on behalf of government (for the period ended 30 June)

Table 3.7: Note of budgeted financial position administered on behalf of government (as at 30 June)

Table 3.8: Note of budgeted administered cash flows
(for the period ended 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 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 Australian Government’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 assets, liabilities, revenues and expenses which are managed by the department on behalf of the Australian Government according to set government directions. Administered expenses include subsidies, grants, and personal benefit payments and administered revenues include taxes, fees, fines and excises.

Royal Australian Mint

The Treasury’s departmental budget statements are aggregated to include the financial operations of the Royal Australian Mint (the Mint). Any profit earned by the Mint, taking into account working capital requirements, is returned to the Australian Government.

Seigniorage is collected by the Mint on behalf of the Australian Government. Seigniorage represents the difference between the face value of coinage sold to the Reserve Bank of Australia and its cost of production to the Mint. Seigniorage is treated as an administered item within the Treasury’s administered budget statements.