5512.0 - Government Finance Statistics, Australia, 2015-16 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 27/04/2017   
   Page tools: Print Print Page Print all pages in this productPrint All RSS Feed RSS Bookmark and Share Search this Product

STATEMENT OF STOCKS AND FLOWS


The international Government Finance Statistics (GFS) standard as promulgated by the International Monetary Fund (IMF) recommends that opening and closing 'stock' values be reconciled with all 'flows' occurring throughout the year. The standard is based on an analytical framework in which all changes in the values of stocks from one year to the next can be fully explained by the flows that have occurred during that year.

Institutional units hold assets (financial and non-financial) and incur liabilities (which by definition are financial). The level of these assets and liabilities at any point in time is the stock. The difference between assets and liabilities is net worth, which is a measure of the 'wealth' of units or of government. Anything which causes a change in these stocks of assets and liabilities is a flow. Flows are disaggregated into transactions and 'other economic flows'. A transaction is, for the most part, an interaction between two units by mutual agreement, whereas an 'other economic flow' is a change in the volume or value of a stock of a unit not resulting from a transaction.

By definition, the value of a stock at the end of a period is the sum of the stock at the beginning of the period and all the flows affecting that stock which took place during the period, i.e. S1 = S0 + F1, where S0 and S1 represent the values of a specific stock at the beginning and end of an accounting period, and F1 represents the net value of all flows during the period relevant to that particular stock.

Statistics on transactions giving rise to revenues and expenses are published as part of the GFS operating statement. Revenues are defined as transactions which increase net worth whereas expenses are transactions which decrease net worth. The difference between revenues and expenses, therefore, represents the change in net worth due to transactions. This equates to the GFS net operating balance.

Other economic flows can be disaggregated into movements in asset/liability values resulting from price changes ('revaluations') and those resulting from volume changes ('other volume changes').

Revaluations result from changes to the value of the assets and liabilities held. Revaluations can accrue to financial assets such as bonds and bills, shares and other forms of equity, as well as non-financial assets such as land and buildings.

Other volume changes refer to events that include:

  • the recognition or de-recognition of assets or liabilities on the balance sheet - e.g. when resources become economically exploitable, or when an asset is no longer providing an economic benefit, and so is removed from the balance sheet
  • changes in the quantity or quality of the existing asset - these typically result from catastrophic losses through natural disasters, changes in the volume of natural assets such as fish or forest stocks, creation, discovery, cancellation or seizure of assets, or quality differences arising from events such as a change in the expected life of the asset
  • changes in the classification of assets - these usually arise when the use of an asset changes, e.g. if the use of a parcel of public land changes from recreational use to industrial use.

The net effect of all revaluations and other volume changes occurring through the year represents the change in net worth due to other economic flows.

Since the values of stocks at the end of a year must be equal to their values at the start of a year, plus all transactions and other economic flows affecting them during the year, it follows that the total change in net worth during a given year is equal to the change in net worth due to transactions, plus the change in net worth arising from other economic flows.

When working with reported data, it is often assumed that the difference between opening and closing net worth and the change in net worth due to transactions is attributable to the change in net worth due to other economic flows (i.e. other economic flows is effectively used as a balancing item). However, to ensure data quality it is necessary to independently collect and calculate the change in net worth due to other economic flows. In situations where the reported data do not add through, it is not necessarily the case that the data quality issue is in the other economic flows component of the framework. Where data quality is high throughout the reported data set, the change in net worth as derived via the balance sheet will be consistent with the sum of transaction and other economic flows.


COMMONWEALTH GENERAL GOVERNMENT - STATEMENT OF STOCKS AND FLOWS

The Commonwealth Government publishes a statement of other economic flows for the general government sector. This statement outlines all revaluations and other volume changes occurring throughout the year, which allows a full reconciliation of stocks and flows. This information allows the Australian Bureau of Statistics (ABS) to disaggregate other economic flows into price and volume effects. While some states also publish a statement of other economic flows, the majority currently do not. For local government, information on the components of other economic flows are also generally unavailable. Accordingly, the ABS does not have enough information on which to disaggregate other economic flows into its two components across the state and local levels of government.

The statement of stocks and flows for the Commonwealth general government sector is presented in Table 1. During 2015-16 the net worth of the Commonwealth general government sector decreased by $116,213m. This was the result of a GFS net operating balance (which reflects the change in net worth due to transactions) of -$35,254m, revaluations of -$81,242m and slightly offset by other volume changes of $283m.

TABLE 1, STATEMENT OF STOCKS AND FLOWS, General Government Sector, Commonwealth

Opening stocks as
at 1 July 2015
Transactions
Revaluations
Other volume
changes(a)
Closing stocks as
at 30 June 2016
$m
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
3 156
482
-
-
3 638
Advances paid
46 053
5 526
664
-
52 243
Investments, loans and placements
136 377
5 255
8 363
-
149 995
Other non-equity assets
62 953
-
3 217
-
66 170
Equity
83 509
7 158
-3 421
-
87 246
Total financial assets
332 048
18 421
8 822
-
359 291
Non-financial assets
Land and fixed assets
120 635
1 335
6 723
283
128 976
Other non-financial assets
2 767
2 147
-1 841
-
3 073
Total non-financial assets
123 401
3 482
4 884
283
132 050
Total assets
455 450
21 902
13 706
283
491 341
less
Liabilities
Deposits held
4 070
145
-5
-
4 210
Advances received
-
-
-
-
-
Borrowing
423 854
57 132
20 807
-
501 793
Unfunded superannuation and other employee entitlements
265 261
-
67 268
-
332 529
Other provisions
10 522
-
1 813
-
12 335
Other non-equity liabilities
38 881
25
4 921
-
43 827
Total liabilities
742 588
57 301
94 804
-
894 693
equals
GFS Net worth
-287 139
-35 254
-81 242
283
-403 352
Net debt
242 338
. .
. .
. .
300 127
Net financial worth
-410 540
. .
. .
. .
-535 402

. . not applicable
- nil or rounded to zero (including null cells)
(a) Source: Department of Finance, Consolidated Financial Statements for the Year Ended 30 June 2016, December 2016.


STATE AND LOCAL GENERAL GOVERNMENT - STATEMENT OF STOCKS AND FLOWS

During 2015-16 the net worth of the state general government sector increased by $24,175m, driven by $17,153m from other economic flows and $7,022m from transactions.

The net worth of the local general government sector increased by $24,144m in 2015-16. Other economic flows contributed $16,370m to this movement.

TABLE 2, STATEMENT OF STOCKS AND FLOWS, General Government Sector, State Government

Opening stocks as at 1 July 2015
Transactions
Other Economic Flows
Closing stocks at 30 June 2016
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
22 398
-6 427
-317
15 654
Advances paid
10 016
146
-162
10 000
Investments, loans and placements
64 906
9 534
278
74 718
Other non-equity assets
28 387
217
-3 433
25 171
Equity
299 057
-5 960
17 170
310 267
Total financial assets
424 763
-2 490
13 536
435 809
Non-financial assets
Land and fixed assets
604 950
9 138
31 604
645 692
Other non-financial assets
3 444
1 400
-525
4 319
Total non-financial assets
608 395
10 538
31 077
650 010
Total assets
1 033 158
8 048
44 614
1 085 820
less
Liabilities
  Deposits held
3 019
381
-7
3 393
  Advances received                                                   
3 945
-5
16
3 956
  Borrowing
134 471
-2 885
8
131 594
  Unfunded superannuation and other employee entitlements
176 679
-8
29 738
206 409
  Other provisions
11 400
-
468
11 868
  Other non-equity liabilities
22 320
3 543
-2 762
23 101
  Total liabilities  
351 834
1 026
27 461
380 321
equals
GFS Net worth
681 324
7 022
17 153
705 499
Net debt
44 115
. .
. .
38 572
Net financial worth
72 930
. .
. .
55 488

. . not applicable
- nil or rounded to zero (including null cells)

TABLE 3, STATEMENT OF STOCKS AND FLOWS, General Government Sector, Local Government

Opening stocks as at 1 July 2015
Transactions
Other Economic Flows
Closing stocks at 30 June 2016
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
10 503
165
205
10 873
Advances paid
35
-1
1
35
Investments, loans and placements
11 903
1 375
-526
12 752
Other non-equity assets
3 736
-412
621
3 945
Equity
7 500
-50
-292
7 158
Total financial assets
33 678
1 076
8
34 762
Non-financial assets
Land and fixed assets
383 824
5 892
16 656
406 372
Other non-financial assets
1 557
146
-23
1 680
Total non-financial assets
385 381
6 037
16 634
408 052
Total assets
419 059
7 114
16 642
442 815
less
Liabilities
Deposits held
502
27
24
553
Advances received                                                   
18
6
-
24
Borrowing
11 818
-462
-390
10 966
Unfunded superannuation and other employee entitlements
3 286
197
-53
3 430
Other provisions
127
108
-108
127
Other non-equity liabilities
4 202
-536
798
4 464
Total liabilities
19 953
-660
271
19 564
equals
GFS Net worth
399 106
7 774
16 370
423 250
Net debt
-10 103
. .
. .
-12 117
Net financial worth
13 725
. .
. .
15 198

. . not applicable
- nil or rounded to zero (including null cells)



For more information on the statement of stocks and flows, refer to Table 2.1 in Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2005 (cat. no. 5514.0) and Chapter 3 of the International Monetary Fund's (IMF) Government Finance Statistics Manual 2014 (GFSM 2014).