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1301.0 - Year Book Australia, 2008  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 07/02/2008   
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Contents >> Government finance >> Public sector

PUBLIC SECTOR

The public sector includes all organisations owned or controlled by any of the three levels of government within the Australian political system - Australian (Commonwealth), state (and territory), and local. The responsibilities of each level of government differ and each level has specific sources of revenue with which to fund its activities.

In the Australian system of GFS, a fourth level of government is also identified - multi-jurisdictional. The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or where classification of a unit to a jurisdiction is otherwise unclear. The main type of units currently falling into the multi-jurisdictional category are the public universities.

The public sector can be divided into three institutional sectors, based on the characteristics of the organisations it comprises:

  • General government - the main function of general government entities is to provide non-market goods and services (e.g. roads, hospitals, libraries) primarily financed by taxes; to regulate and influence economic activity; to maintain law and order; and to redistribute income by means of transfer payments.
  • Public non-financial corporations (PNFCs) - the main function of PNFCs is to provide goods and services which are predominantly market, non-regulatory and non-financial in nature, and financed through sales to consumers of these goods and services.
  • Public financial corporations (PFCs) - PFCs are enterprises which engage in financial intermediation (i.e. trade in financial assets and liabilities), such as central borrowing authorities (the Reserve Bank of Australia), government banks and insurance offices, or home-lending schemes.
Within GFS the consolidated total of the general government, the PNFCs and the PFCs sectors is referred to as the 'total public sector'.

The GFS conceptual framework is divided into a number of separate financial statements, each of which is designed to draw out analytical aggregates, or balances of particular economic significance. Taken together, they provide a comprehensive description of the financial positions of jurisdictions, both individually and collectively. These statements are the operating statement, the cash flow statement, and the balance sheet.

The operating statement presents details of transactions in GFS revenues, GFS expenses and the net acquisition of non-financial assets on an accrual basis for an accounting period. Two key GFS analytical balances in the operating statement are GFS net operating balance (NOB) and GFS net lending(+)/borrowing(-). GFS NOB is the difference between GFS revenues and GFS expenses and reflects the sustainability of government operations. GFS net lending(+)/borrowing(-) is equal to NOB minus the total net acquisition of non-financial assets. A positive result reflects a net lending position while a negative result reflects a net borrowing position.

The cash flow statement identifies how cash is generated and applied in a single accounting period. It reflects a cash basis of recording, where the information has been derived indirectly from underlying accrued transactions and movements in balances. In effect, this means that transactions are captured when cash is received or when cash payments are made. Cash transactions are specially identified because they allow the compilation of the cash-based surplus(+)/deficit(-) measure and because the management of cash is often considered an integral function of accrual accounting.

The surplus(+)/deficit(-) is a broad indicator of cash flow requirements. When it is positive (i.e. in surplus), it reflects the extent to which cash is available to government to either increase its financial assets or decrease its liabilities. When it is negative (i.e. in deficit), it is a measure of the extent to which government requires cash, either by running down its financial assets or by drawing on the cash reserves of the domestic economy, or from overseas.The balance sheet is the statement of an entity's financial position at a specific point in time. It shows the entity's stock of assets, liabilities and GFS net worth. GFS net worth is an economic measure of 'wealth'. For the general government sector it is calculated as assets less liabilities. For the PNFC and PFC sectors, GFS net worth is calculated as assets less liabilities less shares and other contributed capital.

28.1 GENERAL GOVERNMENT OPERATING STATEMENT - 2005-06

Commonwealth
State
Local
Multi-
jurisdictional
(a)
All levels of government(b)
$m
$m
$m
$m
$m

GFS Revenue
260 592
142 574
23 085
15 366
363 701
GFS Expenses
242 600
134 344
20 505
14 017
334 560
Net Operating Balance
17 992
8 230
2 580
1 349
29 141
Net acquisition of non-financial assets
1 434
4 858
2 390
581
9 268
GFS Net Lending(+)/Borrowing(-)
16 558
3 372
190
768
19 872

(a) The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classification of a unit to a jurisdiction is otherwise unclear.
(b) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: Government Finance Statistics, Australia (5512.0).

28.2 TOTAL PUBLIC SECTOR OPERATING STATEMENT - 2005-06

Commonwealth
State
Local
Multi-
jurisdictional
(a)
All levels of
government
(b)
$m
$m
$m
$m
$m

GFS Revenue
285 749
175 925
23 088
15 858
421 703
GFS Expenses
269 005
165 513
20 545
14 463
391 613
Net Operating Balance
16 744
10 411
2 543
1 395
30 090
Net acquisition of non-financial assets
2 089
12 332
2 416
619
17 461
GFS Net Lending(+)/Borrowing(-)
14 655
-1 921
127
775
12 629

(a) The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classification of a unit to a jurisdiction is otherwise unclear.
(b) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: Government Finance Statistics, Australia (5512.0).


28.3 GENERAL GOVERNMENT CASH FLOW STATEMENT - 2005-06

Commonwealth
State
Local
Multi-
jurisdictional
(a)
All levels of
government
(b)
$m
$m
$m
$m
$m

Cash receipts from operating activities
255 501
148 655
21 239
15 676
361 969
Cash payments for operating activities
-236 566
-127 840
-16 781
-13 249
-316 425
Net cash flows from operating activities
18 935
20 815
4 458
2 427
45 544
Net cash flows from investments in non-financial assets
-3 192
-10 539
-5 311
-1 412
-20 454
Net cash flows from investments in financial assets for policy purposes
-1 647
-1 165
-7
-4
-3 051
Net cash flows from investments in financial
assets for liquidity purposes
-12 684
-5 491
-301
-352
-18 827
Net cash flows from financing activities
-982
-971
1 362
152
880
Net Increase(+)/Decrease(-) in Cash Held
430
2 649
201
811
4 091
Net cash flows from operating activities and net cash flows from investments in non-financial assets
15 743
10 276
-854
1 015
25 090
Acquisitions of assets under finance leases and similar arrangements
-24
-494
6
-2
-513
Surplus(+)/Deficit(-)
15 720
9 783
-848
1 013
24 577

(a) The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classifications of a unit to a jurisdiction is otherwise unclear. The main type of units in this category are the public universities.
(b) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: Government Finance Statistics, Australia (5512.0).

28.4 TOTAL PUBLIC SECTOR CASH FLOW STATEMENT - 2005-06

Commonwealth
State
Local
Multi-
jurisdictional
(a)
All levels of
government
(b)
$m
$m
$m
$m
$m

Cash receipts from operating activities
280 540
185 086
21 312
16 218
423 077
Cash payments for operating activities
-255 822
-155 861
-16 803
-13 647
-363 209
Net cash flows from operating activities
24 718
29 226
4 510
2 571
59 866
Net cash flows from investments in non-financial assets
-7 663
-22 780
-5 357
-1 497
-37 294
Net cash flows from investments in financial assets for policy purposes
-1 223
179
-2
-4
-1 282
Net cash flows from investments in financial assets for liquidity purposes
-29 779
-2 487
-310
-594
-33 103
Net cash flows from financing activities
13 497
-2 649
1 314
337
13 746
Net Increase(+)/Decrease(-) in Cash Held
-451
1 489
156
813
1 933
Net cash flows from operating activities, net cash flows from investments in non-financial assets and distributions paid
14 688
6 435
-847
1 004
20 195
Acquisitions of assets under finance leases and similar arrangements
-33
-505
6
-2
-534
Surplus(+)/Deficit(-)
14 655
5 930
-841
1 003
19 661

(a) The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classifications of a unit to a jurisdiction is otherwise unclear.
(b) The sum of individual levels of government may not agree with the All levels of government figures due to transfers between levels of government.
Source: Government Finance Statistics, Australia (5512.0).

28.5 GENERAL GOVERNMENT BALANCE SHEET - 30 June 2006

Commonwealth
State
Local
Multi-
jurisdictional
(a)
All levels of
government
(b)
$m
$m
$m
$m
$m

Assets
Financial assets
151 063
250 386
13 526
12 387
421 087
Non-financial
45 599
302 221
198 337
25 222
571 379
Total
196 662
552 607
211 863
37 609
992 465
Liabilities
206 849
144 444
10 461
8 574
364 053
GFS Net Worth
-10 187
408 163
201 402
29 035
628 413
Net debt(c)
-8 742
-29 807
-4 575
-6 333
-49 456
Net financial worth(d)
-55 786
105 942
3 065
3 813
57 034

(a) The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classifications of a unit to a jurisdiction is otherwise unclear.
(b) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
(c) Equals deposits held, advances received, Reserve Bank of Australia notes on issue and borrowing less cash and deposits, advances paid, and investments, loans and placements.
(d) Equals total financial assets less total liabilities less shares and other contributed capital. While Net financial worth should add across levels of government, small discrepancies may remain due to the difficulties in accurately identifying the parties and counter-parties associated with financial assets and liabilities.
Source: Government Finance Statistics, Australia (5512.0).

28.6 TOTAL PUBLIC SECTOR BALANCE SHEET - 30 June 2006

Commonwealth
State
Local
Multi-
jurisdictional
(a)
All Australian
government
(b)
$m
$m
$m
$m
$m

Assets
Financial assets
218 464
140 617
12 603
12 527
368 692
Non-financial assets
75 269
523 547
199 752
27 359
825 927
Total
293 734
664 164
212 356
39 886
1 194 619
Liabilities
315 217
256 000
10 954
9 554
577 016
Shares and other contributed capital
22 018
-
-
816
22 022
GFS Net Worth
-43 501
408 163
201 402
29 516
595 580
Net debt(c)
-14 927
-15 020
-4 342
-5 437
-39 725
Net financial worth(d)
-118 770
-115 384
1 650
2 157
-230 347

- nil or rounded to zero (including null cells)
(a) The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classifications of a unit to a jurisdiction is otherwise unclear.
(b) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
(c) Equals deposits held, advances received, Reserve Bank of Australia notes on issue and borrowing less cash and deposits, advances paid, and investments, loans and placements.
(d) Equals total financial assets less total liabilities less shares and other contributed capital. While Net financial worth should add across levels of government, small discrepancies may remain due to the difficulties in accurately identifying the parties and counter-parties associated with financial assets and liabilities.
Source: Government Finance Statistics, Australia (5512.0).





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