5512.0 - Government Finance Statistics, Australia, 2016-17 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 26/04/2018   
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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 2016-17 the net worth of the Commonwealth general government sector increased by $18,631m. This was the result of revaluations of $51,067m and partially offset by a GFS net operating balance (which reflects the change in net worth due to transactions) of -$32,436m.

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

Opening stocks as
at 1 July 2016
Transactions
Revaluations
Other volume
changes(a)
Closing stocks as
at 30 June 2017
$m
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
3 638
1 503
-1
-
5 140
Advances paid
52 243
6 115
-11 254
-
47 104
Investments, loans and placements
149 995
37 318
5 938
-
193 251
Other non-equity assets
66 033
-
2 175
-
68 208
Equity
87 244
73 86
-4 618
-
90 012
Total financial assets
359 152
52 322
-7 759
-
403 715
Non-financial assets
Land and fixed assets
128 976
1 478
2 239
-
132 693
Other non-financial assets
3 073
1 590
-1 399
-
3 264
Total non-financial assets
132 050
3 068
838
-
135 956
Total assets
491 202
55 390
-6 921
-
539 671
less
Liabilities
Deposits held
10 005
104
-222
-
9 887
Advances received
-
-
-
-
-
Borrowing
495 998
84 908
-21 071
-
559 835
Unfunded superannuation and other employee entitlements
332 529
-
-34 937
-
297 592
Other provisions
12 335
-
6 671
-
19 006
Other non-equity liabilities
42 785
2 921
-8 537
-
37 169
Total liabilities
893 651
87 933
-58 095
-
923 489
equals
GFS Net worth
-402 449
-32 436
51 067
-
-383 818
Net debt
300 127
. .
. .
. .
324 228
Net financial worth
-534 499
. .
. .
. .
-519 774

. . not applicable
- nil or rounded to zero (including null cells)
(a) Source: Department of Finance, Consolidated Financial Statements for the Year Ended 30 June 2017, December 2017.


STATE AND LOCAL GENERAL GOVERNMENT - STATEMENT OF STOCKS AND FLOWS

During 2016-17 the net worth of the state general government sector increased by $76,113m, driven by $66,236m from other economic flows and $9,877m from transactions.

The net worth of the local general government sector increased by $23,365m in 2016-17. Other economic flows contributed $13,747m to this movement.

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

Opening stocks as at 1 July 2016
Transactions
Other Economic Flows
Closing stocks at 30 June 2017
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
15 654
4 778
-736
19 696
Advances paid
9 194
22
90
9 306
Investments, loans and placements
74 807
15 671
-7 376
83 102
Other non-equity assets
24 968
285
1 936
27 189
Equity
313 025
-22 427
41 628
332 226
Total financial assets
437 648
-1 672
35 543
471 519
Non-financial assets
Land and fixed assets
647 129
15 414
8 215
670 758
Other non-financial assets
4 087
1 270
142
5 499
Total non-financial assets
651 216
16 683
8 358
676 257
Total assets
1 088 864
15 011
43 900
1 147 775
less
Liabilities
  Deposits held
3 393
-18
344
3 719
  Advances received                                                   
3 956
1 328
-110
5 174
  Borrowing
131 717
-1 177
2 044
132 584
  Unfunded superannuation and other employee entitlements
206 409
-19
-23 487
182 903
  Other provisions
11 917
-
882
12 799
  Other non-equity liabilities
23 162
5 020
-2 007
26 175
  Total liabilities  
380 554
5 134
-22 335
363 353
equals
GFS Net worth
708 310
9 877
66 236
784 423
Net debt
39 412
. .
. .
29 373
Net financial worth
57 094
. .
. .
108 166

. . 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 2016
Transactions
Other Economic Flows
Closing stocks at 30 June 2017
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
10 554
1 693
-316
11 931
Advances paid
35
1
6
42
Investments, loans and placements
13 133
1 841
238
15 212
Other non-equity assets
3 949
-146
510
4 313
Equity
7 167
-50
338
7 455
Total financial assets
34 838
3 339
776
38 953
Non-financial assets
Land and fixed assets
406 348
5 665
13 971
425 984
Other non-financial assets
1 656
143
-110
1 689
Total non-financial assets
408 004
5 808
13 861
427 673
Total assets
442 841
9 146
14 639
466 626
less
Liabilities
Deposits held
553
1
33
587
Advances received                                                   
16
12
-13
15
Borrowing
11 013
50
181
11 244
Unfunded superannuation and other employee entitlements
3 398
60
-21
3 437
Other provisions
127
83
-120
90
Other non-equity liabilities
4 465
-676
829
4 618
Total liabilities
19 572
-471
891
19 992
equals
GFS Net worth
423 269
9 618
13 747
446 634
Net debt
-12 139
. .
. .
-15 338
Net financial worth
15 266
. .
. .
18 961

. . 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).