02_Treasury

Section 3: Budgeted financial statements

Analysis of budgeted financial statements

Departmental

Treasury is budgeting towards a breakeven operating result for 2005-06.

Treasury will have reduced net estimated revenues in 2005-06 of $47.7 million. This decrease relates mainly to revenues earned by the Royal Australian Mint (the Mint) which became a prescribed agency effective from 1 July 2005. The increase in appropriation revenue ($0.07 million) from the original budget relates to funding received for new Measures offset by section 32 transfers and parameter adjustments.

As a result of the Mint becoming a prescribed agency effective from 1 July 2005, the net assets of Treasury have been reduced in the revised budget ($35.8 million) and forward years. Table 3.4 provides further details.

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 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.

Budgeted financial statements

Departmental financial statements

Budgeted departmental income statement

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

Budgeted departmental balance sheet

This statement shows the financial position of 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 statement of changes in equity — summary of movement

This statement provides information on changes in the amount and nature of equity for the Budget year 2005-06.

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 property, plant, equipment and intangibles — summary of movement

Shows budgeted acquisitions and disposals of non-financial assets during the Budget year.

Schedule of administered activity

Schedule of budgeted income and expenses administered on behalf of government

This schedule identifies the main revenues and expenses administered on behalf of the Australian Government.

Schedule of budgeted assets and liabilities administered on behalf of government

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

Schedule of budgeted administered cash flows

This schedule shows cash flows administered on behalf of the Australian Government.

Schedule of administered capital budget

This schedule shows details of planned administered capital expenditure.

Table 3.1: Budgeted departmental income statement (for the period ended 30 June)

Table 3.1: Budgeted departmental income statement(for the period ended 30 June)

Table 3.2: Budgeted departmental balance sheet (as at 30 June)

Table 3.2: Budgeted departmental balance sheet(as at 30 June)

* ‘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 statement of changes in equity — summary of movement (Budget year 2005-06)

1 The Mint became a prescribed agency effective from 1 July 2005.

Table 3.5: Departmental capital budget statement

Table 3.6: Departmental property, plant, equipment and intangibles — summary of movement
(Budget year 2005-06)

Table 3.6: Departmental property, plant, equipment and intangibles — summary of movement (Budget year 2005-06)

Table 3.7: Schedule of budgeted income and expenses administered on behalf of government (for the period ended 30 June)

Table 3.8: Schedule of budgeted assets and liabilities administered on behalf of government (as at 30 June)

Table 3.9: Schedule of budgeted administered cash flows (for the period ended 30 June)

Table 3.9: Schedule of budgeted administered cash flows(for the period ended 30 June)

Table 3.10: Schedule of administered capital budget

Table 3.11: Schedule of administered property, plant, equipment and intangibles — summary of movement (Budget year 2005-06)

This table is not applicable to Treasury.

Notes to the financial statements

Basis of accounting

Treasury’s budgeted statements have been prepared on an accrual basis in accordance with:

Australian Government’s financial budgeting and reporting framework;
Australian Accounting Standards (AAS), being the Australian Equivalent to International Reporting Standards (AEIFRS); and
Consensus Views of the Urgent Issues Group.

The budgeted income statement and balance sheet have been prepared in accordance with the historical cost convention, except certain assets, which are at valuation.

Departmental and administered financial statements

Under the Australian Government’s accrual budgeting framework, and consistent with AAS, transactions that Treasury control (departmental) are separately budgeted for, and reported on than from transactions that Treasury does not have control over (administered). 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 Treasury. 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 Treasury 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 Royal Australian Mint became a prescribed agency effective from 1 July 2005 and is no longer a special account of Treasury.