Statement 9: Australian Government Budget Financial Statements (continued)

Notes to the general government sector financial statements

Note 1: External reporting standards and accounting policies

The Charter of Budget Honesty Act 1998 (the Charter) requires that the Budget be based on external reporting standards and that departures from applicable external reporting standards be identified.

The external standards used for budget reporting purposes are:

the Australian Bureau of Statistics' (ABS) accrual Government Finance Statistics (GFS) publication, Australian System of Government Finance Statistics: Concepts, Sources and Methods 2005, (cat. no. 5514.0), which in turn is based on the International Monetary Fund (IMF) accrual GFS framework; and
the Australian Accounting Standards (AAS), issued by the Australian Accounting Standards Board (AASB), which includes International Financial Reporting Standards (IFRS) as adopted in Australia and the public sector specific standard AASB 1049 Whole of Government and General Government Sector Financial Reporting.

The financial statements have been prepared on an accrual basis that complies with both ABS GFS and AAS, except for departures disclosed at Note 2. A more detailed description of the AAS and ABS GFS frameworks, in addition to definitions of key terms used in these frameworks, can be found in Appendix A. Detailed accounting policies, as well as a set of notes and other disclosures, as required by AAS, are disclosed in the annual Consolidated Financial Statements.

Fiscal reporting focuses on the general government sector (GGS). The GGS provides public services that are mainly non-market in nature and for the collective consumption of the community, or involve the transfer or redistribution of income. These services are largely financed through taxes and other compulsory levies, user charging and external funding. This sector comprises all government departments, offices and some other bodies. In preparing financial statements for the GGS, all material transactions and balances between entities within the GGS have been eliminated.

The Government's key fiscal aggregates are based on ABS GFS concepts and definitions, including the ABS GFS cash surplus/deficit and the derivation of the underlying cash balance and net financial worth. AASB 1049 requires the disclosure of other ABS GFS fiscal aggregates, including net operating balance, net lending/borrowing (fiscal balance) and net worth. In addition to these ABS GFS aggregates, the Uniform Presentation Framework (UPF) requires disclosure of net debt, net financial worth and net financial liabilities.

AASB 1049 and the UPF also provide a basis for reporting of the public non‑financial corporations (PNFC) and public financial corporations (PFC) sectors and the total non‑financial public sector (NFPS).

AASB 1049 requires disaggregated information, by ABS GFS function, for expenses and total assets to be disclosed where they are reliably attributable. ABS GFS does not require total assets to be attributed to functions. In accordance with ABS GFS, disaggregated information for expenses and net acquisition of non‑financial assets by function is disclosed in Statement 5: Expenses and Net Capital Investment. In accordance with the UPF, purchases of non‑financial assets by function are also disclosed in Statement 5.

AASB 1055 requires major variances between original budget estimates and outcomes to be explained in the financial statements. Explanations of variations in fiscal balance, revenue, expenses, net capital investment, cash flows, net debt, net financial worth and net worth since the Mid‑Year Economic and Fiscal Outlook 2015‑16 (MYEFO) are disclosed in Statement 3: Fiscal Strategy and Outlook, with decisions taken since the MYEFO disclosed in Budget Paper No. 2 Budget Measures 2016‑17. All policy decisions taken between the 2015‑16 Budget and the 2015‑16 MYEFO are disclosed in Appendix A of the MYEFO.

Details of the Australian Government's GGS contingent liabilities are disclosed in Statement 8: Statement of Risks.

Note 2: Departures from external reporting standards

The Charter requires that departures from applicable external reporting standards be identified. The major differences between AAS and the ABS GFS treatments of transactions are outlined in Table 13.

AASB 1049 requires AAS measurement of items to be disclosed on the face of the financial statements with reconciliation to ABS GFS measurement of key fiscal aggregates, where different, in notes to the financial statements. Differences from the AAS measurement of items outlined above and reconciliation have not been included as they would effectively create different measures of the same aggregate.

Further information on the differences between the two systems is provided in the ABS publication Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2005 (cat. no. 5514.0).

Table 13: Major differences between AAS and ABS GFS
Issue	AAS treatment	ABS GFS treatment	Treatment adopted
Acquisition of defence weapons platforms (DWP)	AASB 1049 allows cost to be used where fair value of assets cannot be reliably measured.	ABS record DWP on a market value basis using the perpetual inventory method.	AAS cost method until fair value can be measured reliably
Circulating coins — seigniorage	The profit between the cost and sale of circulating coins (seigniorage) is treated as revenue.	Circulating coins is treated as a liability, and the cost of producing the coins is treated as an expense.	AAS
Provisions for bad and doubtful debts	Reported in the balance sheet as an offset to assets. Under AASB 1049, it is included in the operating statement as other economic flows.	Creating provisions for bad and doubtful debts is not considered an economic event and is therefore not considered to be an expense or reflected in the balance sheet.	AAS
Advances to the International Development Association and Asian Development Fund	Recorded at fair value in the balance sheet.	Recorded at nominal value in the balance sheet.	ABS GFS
Concessional loans	Discounts concessional loans by a market rate of a similar instrument.	Does not discount concessional loans as no secondary market is considered to exist.	AAS
Investment in other public sector entities	Valued at fair value in the balance sheet as long as it can be reliably measured, otherwise net assets is permissible.	Unlisted entities valued based on their net assets in the balance sheet.	AAS
Provision for restoration, decommissioning and make‑good	Included in the fiscal balance capital adjustment.	Excluded from the calculation of net lending capital adjustment.	AAS
Renewable Energy Certificates (RECs)	The issuance and registration of RECs is considered to be an administrative function and does not result in the recognition of assets or liabilities and, consequently, no revenues or expenses are recognised.	The issuance and registration of RECs is considered to be government financial transactions resulting in the recognition of assets, liabilities, revenue and expenses.	AAS
Dividends paid by public corporations	Treated as an equity distribution. Equity distributions are treated as a distribution of profits, as opposed to an expense.	Dividends are treated as an expense.	ABS GFS
Dividends paid by the Reserve Bank of Australia	Dividends are recognised in the year profit was earned.	Dividends are recognised when the Treasurer makes a determination.	AAS
Commercial tax effect accounting assets and liabilities	Corporations in the PNFC and PFC sectors record tax expenses on a commercial basis.	Deferred tax assets and liabilities are reversed so that corporations record tax expenses on a consistent basis to the Australian Taxation Office.	ABS GFS
Fiscal aggregates differences
Finance leases	Does not deduct finance leases in the derivation of the cash surplus/deficit.	Deducts finance leases in the derivation of the cash surplus/deficit.	Both are disclosed
Net worth of PNFC and PFC sectors	Calculated as assets less liabilities.	Calculated as assets less liabilities less shares and other contributed capital.	AAS
Net financial worth of PNFC and PFC sectors	Calculated as financial assets less total liabilities.	Calculated as financial assets less total liabilities less shares and contributed capital.	AAS
Classification difference
Prepayments	Treated as a non‑financial asset.	Treated as a financial asset.	ABS GFS
Spectrum sales	Recognise non‑financial asset sales for fiscal balance when payment is made and the licences take effect, which may be after the auction of licences, as this is regarded as the point control is transferred. Recognise cash at the time of receipt.	Recognise non‑financial asset sales for fiscal balance at time of auction as this is regarded as the point control is transferred. Recognise cash at the time of receipt.	AAS

Note 3: Taxation revenue by type
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Individuals and other withholding taxes
Gross income tax withholding	175,510	183,380	194,920	207,120	219,990
Gross other individuals	44,850	47,300	51,530	56,330	60,915
less Refunds	27,800	29,350	31,250	34,350	35,700
Total individuals and other withholding taxation	192,560	201,330	215,200	229,100	245,205
Fringe benefits tax	4,590	4,760	4,650	4,840	5,070
Company tax	65,000	70,100	78,300	86,400	92,318
Superannuation fund taxes	6,710	7,510	9,140	10,160	11,080
Petroleum resource rent tax	840	850	780	790	810
Income taxation revenue	269,700	284,550	308,070	331,290	354,483
Goods and services tax	60,040	63,340	66,910	70,740	73,470
Wine equalisation tax	880	910	1,000	1,050	1,210
Luxury car tax	590	570	570	600	630
Excise and customs duty
Petrol	6,220	6,450	6,710	7,060	7,430
Diesel	9,490	9,870	10,270	10,870	11,440
Other fuel products	2,243	2,235	2,270	2,350	2,460
Tobacco	9,410	10,160	10,990	12,310	13,490
Beer	2,370	2,390	2,450	2,490	2,520
Spirits	2,040	2,100	2,130	2,200	2,280
Other alcoholic beverages^(a)	910	940	960	990	1,040
Other customs duty
Textiles, clothing and footwear	470	310	260	280	310
Passenger motor vehicles	570	590	650	710	770
Other imports	1,550	1,170	900	950	1,020
less: Refunds and drawbacks	420	420	420	420	420
Total excise and customs duty	34,853	35,795	37,170	39,790	42,340
Agricultural levies	514	494	495	501	505
Other taxes^(b)	5,346	5,625	5,728	5,822	5,925
Mirror taxes	527	553	582	611	630
less Transfers to States in relation to mirror tax revenue	527	553	582	611	630
Mirror tax revenue	0	0	0	0	0
Indirect taxation revenue	102,223	106,733	111,873	118,503	124,080
Taxation revenue	371,923	391,283	419,944	449,793	478,563
Memorandum:
Total excise	21,423	21,785	22,550	23,650	24,780
Total customs duty	13,430	14,010	14,620	16,140	17,560
Capital gains tax^(c)	10,600	12,300	13,900	15,900	17,500
Medicare and DisabilityCare Australia levy	14,970	15,440	16,100	16,870	17,690

(a) Other alcoholic beverages are those not exceeding 10 per cent by volume of alcohol (excluding beer, brandy and wine).

(b) Visa application charges were reclassified in the 2015‑16 MYEFO from non-taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The back-casting relating to the reclassification is reflected in Statement 10 - Historical Series from 2003‑04. See also Note 3(a), Taxation revenue by source and Note 4, Sales of goods and services revenue.

Note 3(a): Taxation revenue by source^(a)
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Taxes on income, profits and capital gains
Income and capital gains levied on individuals	197,160	206,120	219,860	233,950	250,285
Income and capital gains levied on enterprises	72,540	78,430	88,210	97,340	104,198
Total taxes on income, profits and capital gains	269,700	284,550	308,070	331,290	354,483
Taxes on employers' payroll and labour force	710	702	684	722	725
Taxes on the provision of goods and services
Sales/goods and services tax	61,510	64,820	68,480	72,390	75,310
Excises and levies	21,937	22,279	23,045	24,151	25,285
Taxes on international trade	13,430	14,010	14,620	16,140	17,560
Total taxes on the provision of goods and services	96,877	101,109	106,145	112,681	118,155
Other taxes^(a)	4,636	4,923	5,045	5,100	5,199
Total taxation revenue	371,923	391,283	419,944	449,793	478,563
Memorandum:
Medicare and DisabilityCare Australia levy	14,970	15,440	16,100	16,870	17,690

(a) Visa application charges were reclassified in the 2015‑16 MYEFO from non-taxation revenue to taxation revenue to reflect a sustained change in the nature of revenue. The back-casting relating to the reclassification is reflected in Statement 10 - Historical Series from 2003‑04. See also Note 3, Taxation revenue by type and Note 4, Sales of goods and services revenue.

Note 4: Sales of goods and services revenue
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Sales of goods	1,680	1,790	1,954	1,865	1,827
Rendering of services	4,123	5,514	8,032	11,613	12,711
Operating lease rental	74	64	66	68	68
Fees from regulatory services^(a)	1,820	1,881	1,959	2,012	2,157
Total sales of goods and services revenue	7,697	9,249	12,011	15,558	16,763

Note 5: Interest and dividend revenue
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Interest from other governments
State and Territory debt	54	63	74	85	97
Housing agreements	129	124	119	114	109
Total interest from other governments	183	187	193	199	206
Interest from other sources
Advances	47	61	87	114	130
Deposits	88	92	92	93	95
Bank deposits	144	114	113	120	124
Indexation of HELP receivable and other student loans	504	873	1,015	1,258	1,529
Other	2,541	2,953	3,342	3,991	4,742
Total interest from other sources	3,323	4,093	4,648	5,576	6,619
Total interest	3,506	4,280	4,841	5,775	6,825
Dividends
Dividends from other public sector entities	2,955	360	571	720	266
Other dividends	2,609	2,882	3,095	3,325	3,579
Total dividends	5,564	3,242	3,666	4,045	3,845
Total interest and dividend revenue	9,069	7,522	8,507	9,821	10,670

Note 6: Other sources of non‑taxation revenue
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Industry contributions	116	127	130	131	129
Royalties	1,065	716	689	626	635
Seigniorage	132	120	105	97	90
Other	6,393	7,844	8,138	8,344	8,213
Total other sources of non-taxation revenue	7,706	8,807	9,063	9,198	9,066

Note 7: Employee and superannuation expense
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Wages and salaries expenses	19,767	20,071	19,864	20,015	20,417
Other operating expenses
Leave and other entitlements	2,146	2,149	2,115	2,114	2,076
Separations and redundancies	168	51	39	38	38
Workers compensation premiums and claims	892	948	980	989	1,009
Other	2,277	2,304	2,284	2,304	2,382
Total other operating expenses	5,483	5,452	5,418	5,445	5,504
Superannuation expenses
Superannuation	7,052	4,618	4,693	4,783	4,828
Superannuation interest cost	9,167	9,959	10,330	10,706	11,085
Total superannuation expenses	16,220	14,577	15,023	15,489	15,913
Total employee and superannuation expense	41,469	40,100	40,305	40,949	41,835

Note 8: Depreciation and amortisation expense
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Depreciation
Specialist military equipment	3,232	3,587	3,740	4,143	4,688
Buildings	1,401	1,373	1,383	1,404	1,432
Other infrastructure, plant and equipment	1,454	1,431	1,448	1,452	1,465
Heritage and cultural assets	91	94	94	94	94
Total depreciation	6,178	6,485	6,666	7,094	7,680
Total amortisation	988	1,037	994	968	960
Total depreciation and amortisation expense	7,165	7,522	7,660	8,061	8,640

Note 9: Supply of goods and services expense
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Supply of goods and services	26,337	29,132	27,759	28,274	29,099
Operating lease rental expenses	2,541	2,544	2,581	2,665	2,641
Personal benefits — indirect(a)	45,327	47,397	49,471	59,033	62,757
Health care payments	5,080	5,048	4,962	4,872	4,842
Other	2,129	2,624	2,786	2,556	2,518
Total supply of goods and services expense	81,414	86,745	87,558	97,400	101,857

(a) Includes the Child Care Subsidy, which commences from 2018-19, with the majority of payments to be made directly to child care providers. See also Note 12, Personal benefits expense.

Note 10: Interest expense
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Interest on debt
Government securities^(a)	15,360	16,643	17,626	18,345	18,683
Loans	10	5	5	5	5
Other	258	253	309	332	350
Total interest on debt	15,627	16,901	17,940	18,682	19,037
Other financing costs	1,146	1,824	1,824	1,858	1,781
Total interest expense	16,774	18,725	19,764	20,539	20,818

(a) Public debt interest estimates are calculated using the contract interest rates incurred on existing Commonwealth Government Securities (CGS) when issued and on technical assumptions, based on prevailing market interest rates across the yield curve, for yields on future CGS issuance.

Note 11: Current and capital grants expense
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Current grants expense
State and Territory governments	100,142	106,264	111,013	118,048	119,930
Local governments	6	2	0	0	0
Private sector	6,461	8,257	8,100	8,193	8,166
Overseas	3,680	4,243	3,716	4,018	4,733
Non-profit organisations	2,771	3,110	3,438	3,112	2,938
Multi-jurisdictional sector	10,527	10,390	10,381	10,147	10,335
Other	4,807	6,701	11,832	18,652	22,684
Total current grants expense	128,393	138,966	148,480	162,171	168,786
Capital grants expense
Mutually agreed write-downs	1,722	1,845	1,959	2,102	2,246
Other capital grants
State and Territory governments	7,075	9,492	8,873	4,784	3,594
Local governments	972	786	668	353	379
Private sector	0	0	0	0	0
Multi-jurisdictional sector	106	105	105	102	104
Other	200	279	494	778	947
Total capital grants expense	10,076	12,508	12,098	8,121	7,270
Total grants expense	138,469	151,474	160,578	170,291	176,055

Note 12: Personal benefits expense
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Social welfare - assistance to the aged	43,758	45,778	47,174	49,828	52,074
Assistance to veterans and dependants	5,730	5,518	5,292	5,128	4,992
Assistance to people with disabilities	24,440	25,490	26,520	27,528	28,915
Assistance to families with children^(a)	35,825	34,153	33,548	28,736	29,486
Assistance to the unemployed	10,896	10,431	10,277	11,420	11,823
Student assistance	3,440	3,072	2,957	3,330	3,460
Other welfare programs	1,096	1,057	377	404	437
Financial and fiscal affairs	364	347	337	331	340
Vocational and industry training	63	84	92	93	94
Other	7,803	6,631	8,268	10,367	14,752
Total personal benefits expense	133,416	132,562	134,844	137,165	146,374

(a) The majority of payments under the Child Care Subsidy, which commences from 2018-19, are to be made directly to child care providers. See also Note 9, Supply of goods and services expense.

Note 13: Advances paid and other receivables
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Advances paid
Loans to State and Territory governments^(a)	3,907	4,175	4,357	4,646	5,076
Higher Education Loan Program	37,080	44,105	51,976	60,249	69,210
Student Financial Supplement Scheme	483	438	389	339	289
Other^(a)	11,560	14,294	16,631	18,962	21,569
less Provision for doubtful debts	248	375	501	639	788
Total advances paid	52,782	62,637	72,852	83,557	95,356
Other receivables
Goods and services receivable	882	885	890	898	911
Recoveries of benefit payments	4,767	5,635	6,233	5,911	5,779
Taxes receivable	19,514	20,874	22,949	25,542	27,321
Prepayments	4,492	4,324	4,110	3,832	3,527
Other	20,515	19,080	20,402	22,092	22,650
less Provision for doubtful debts	1,678	2,153	2,588	2,715	2,785
Total other receivables	48,492	48,646	51,997	55,560	57,404

(a) Farm loans have been reclassified from 'other' to 'loans to State and Territory governments' to reflect the actual circumstances of the loans.

Note 14: Investments, loans and placements
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Investments - deposits	40,954	52,357	55,004	51,988	40,032
IMF quota	12,852	12,852	13,077	13,304	13,304
Other	99,427	108,270	120,530	123,781	139,487
Total investments, loans and placements	153,233	173,479	188,611	189,073	192,823

Note 15: Total non‑financial assets
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Land and buildings
Land	9,729	9,674	9,610	9,604	9,617
Buildings	25,992	26,391	26,676	26,926	27,532
Total land and buildings	35,721	36,065	36,285	36,530	37,149
Plant, equipment and infrastructure
Specialist military equipment	45,580	47,473	51,111	55,318	59,517
Other	14,112	14,766	15,357	15,343	15,318
Total plant, equipment and infrastructure	59,692	62,239	66,468	70,661	74,835
Inventories
Inventories held for sale	1,454	1,615	1,591	1,570	1,615
Inventories not held for sale	6,741	6,569	6,342	6,121	5,898
Total inventories	8,195	8,184	7,933	7,691	7,513
Intangibles
Computer software	3,914	4,055	3,972	3,907	3,840
Other	2,967	3,359	3,848	4,110	4,333
Total intangibles	6,881	7,414	7,820	8,017	8,173
Total investment properties	200	200	200	200	200
Total biological assets	44	44	44	44	44
Total heritage and cultural assets	11,697	11,658	11,620	11,582	11,543
Total assets held for sale	174	147	80	80	80
Total other non-financial assets	262	288	134	127	125
Total non-financial assets	122,866	126,238	130,584	134,930	139,662

Note 16: Loans
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Promissory notes	10,010	9,474	9,449	9,426	9,401
Special drawing rights	5,667	5,667	5,773	5,880	5,880
Other	747	598	510	426	362
Total loans	16,425	15,739	15,732	15,731	15,643

Note 17: Employee and superannuation liabilities
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Total superannuation liability^(a)	169,308	175,661	182,026	188,394	194,739
Other employee liabilities
Leave and other entitlements	7,323	7,414	7,491	7,589	7,677
Accrued salaries and wages	566	609	618	628	666
Workers compensation claims	3,265	3,293	3,325	3,361	3,404
Other	5,850	6,016	6,237	6,467	6,697
Total other employee liabilities	17,004	17,332	17,671	18,046	18,445
Total employee and
superannuation liabilities	186,313	192,993	199,697	206,440	213,184

(a) For budget reporting purposes, a discount rate applied by actuaries in preparing Long Term Cost Reports is used to value the superannuation liability. This reduces the volatility in reported liabilities that would occur from year to year if the long term government bond rate were used. Consistent with AAS, the long term government bond rate as at 30 June is used to calculate the superannuation liability for the purpose of actuals reporting.

Note 18: Provisions and payables
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Suppliers payable
Trade creditors	4,670	4,780	4,872	4,993	5,009
Operating lease rental payable	330	343	345	342	336
Other creditors	868	969	971	972	974
Total suppliers payable	5,868	6,092	6,188	6,307	6,319
Total personal benefits provisions and payables	14,446	13,542	12,294	11,883	12,086
Total subsidies provisions and payables	4,908	5,216	5,489	5,816	6,211
Grants provisions and payables
State and Territory governments	87	111	109	105	107
Non-profit organisations	146	146	145	145	145
Private sector	373	372	371	371	371
Overseas	1,166	2,097	1,751	1,568	2,538
Local governments	2	2	2	2	2
Other	8,692	8,149	7,867	8,194	8,550
Total grants provisions and payables	10,466	10,876	10,246	10,386	11,714
Other provisions and payables
Provisions for tax refunds	2,932	2,955	2,969	2,961	2,952
Other	10,305	11,936	10,535	10,612	10,779
Total other provisions and payables	13,237	14,891	13,503	13,573	13,731

Note 19: Reconciliation of cash
	2015‑16	2016‑17	2017‑18	2018‑19	2019‑20
	Estimates			Projections
	$m	$m	$m	$m	$m
Operating balance (revenues less expenses)	-35,074	-33,691	-15,287	-4,954	3,458
less Revenues not providing cash
Other	1,862	2,362	2,173	2,296	2,916
Total revenues not providing cash	1,862	2,362	2,173	2,296	2,916
plus Expenses not requiring cash
Increase/(decrease) in employee entitlements	8,261	6,690	6,714	6,747	6,751
Depreciation/amortisation expense	7,165	7,522	7,660	8,061	8,640
Mutually agreed write-downs	1,722	1,845	1,959	2,102	2,246
Other	1,146	1,156	1,673	1,706	1,103
Total expenses not requiring cash	18,295	17,214	18,006	18,616	18,740
plus Cash provided/(used) by working capital items
Decrease/(increase) in inventories	-135	-260	-42	-54	-131
Decrease/(increase) in receivables	-7,398	-6,351	-10,230	-10,744	-9,754
Decrease/(increase) in other financial assets	1,716	2,478	2,945	2,811	2,425
Decrease/(increase) in other non-financial assets	0	-61	-49	-37	-27
Increase/(decrease) in benefits, subsidies and grants payable	-298	-67	-1,423	190	1,958
Increase/(decrease) in suppliers' liabilities	690	74	73	64	-24
Increase/(decrease) in other provisions and payables	-1,646	-1,884	-2,383	-2,762	-2,058
Net cash provided/(used) by working capital	-7,072	-6,070	-11,110	-10,533	-7,610
equals (Net cash from/(to) operating activities)	-25,712	-24,909	-10,565	833	11,673
plus (Net cash from/(to) investing activities)	-35,169	-48,108	-36,905	-23,050	-27,210
Net cash from operating activities and investment	-60,881	-73,017	-47,469	-22,217	-15,537
plus (Net cash from/(to) financing activities)	61,238	74,379	46,035	21,937	15,065
equals Net increase/(decrease) in cash	356	1,362	-1,434	-280	-472
Cash at the beginning of the year	3,156	3,512	4,874	3,440	3,160
Net increase/(decrease) in cash	356	1,362	-1,434	-280	-472
Cash at the end of the year	3,512	4,874	3,440	3,160	2,688

Statement 9: Australian Government Budget Financial Statements (continued)

Notes to the general government sector financial statements

Note 1: External reporting standards and accounting policies

Note 2: Departures from external reporting standards

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