Cash flows
In 2007-08, an underlying cash surplus of $10.6 billion is expected, compared with the MYEFO estimate of $9.7 billion. While the 2007-08 underlying cash balance has increased by $1.0 billion, the fiscal balance has increased by only $0.1 billion compared to the MYEFO estimate of $9.9 billion. This difference between the change in the underlying cash balance and the fiscal balance is largely attributable to the increase in penalty remissions expenses by the Australian Taxation Office, which do not have a cash impact.
Table 3 provides a summary of Australian Government general government sector cash flows.
Table 3: Summary of Australian Government general government sector cash flows(a)
- Cash flows are derived from the accrual GFS framework excluding GST.
- Equivalent to cash receipts from the sale of non-financial assets in the GFS cash flow statement.
- Equivalent to cash payments for purchases of new and second hand non-financial assets in the GFS cash flow statement.
- The acquisition of assets under finance leases decreases the underlying cash balance. The disposal of assets previously held under finance leases increases the underlying cash balance.
- Excludes expected Future Fund earnings from 2005-06 onwards.
- Under the cash budgeting framework, these cash flows were referred to as net advances.
- The earnings assume the gross proceeds from the sale of Telstra are transferred to the Future Fund. The Fund is assumed to earn a rate of return initially equal to the yield on other term deposits held by the Government then increasing to a rate consistent with the benchmark return specified in the Government's investment mandate. The earnings exclude capital gains which are reflected in the statement of other economic flows (Table B4).
Table 4 provides a reconciliation of the variations in the underlying cash balance estimates.
Table 4: Reconciliation of Australian Government general government sector underlying cash balance estimates
- Excludes the public debt net interest effect of policy measures.
- Excludes expected Future Fund earnings from 2005-06 onwards.
Headline cash balance
A headline cash surplus of $18.3 billion is now forecast for 2007-08 compared with a surplus of $17.6 billion at MYEFO. The increase in the headline cash surplus since MYEFO largely reflects the higher than expected underlying cash balance surplus.