5512.0 - Government Finance Statistics, Australia, 2008-09
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/04/2010
Page tools: Print All RSS Search this Product

2008-09 STATEMENT OF STOCKS AND FLOWS

1 The international GFS standard as promulgated by the International Monetary Fund 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.

2 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.

3 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.

4 Statistics on transactions giving rise to revenues and expenses are currently 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.

5 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').

6 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.

7 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.

8 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.

9 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.

10 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 three independently reported components (i.e. change in net worth as derived via the balance sheet, change in net worth due to transactions, and change in net worth due to other economic flows) will be consistent with each other.

COMMONWEALTH GENERAL GOVERNMENT - STATEMENT OF STOCKS AND FLOWS

11 The change in the treatment of Defence Weapons Platforms, which are now capitalised to align with the System of National Accounts 2008, has impacted on the Statement of Stocks and Flows for the Commonwealth General Government. The time series has been revised to reflect this change which has altered the value of the opening stocks as at June 2008, along with other revisions. The statement for 2008-09 is not comparable to previously published data.

12 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 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.

13 The statement of stocks and flows for the Commonwealth general government sector is presented in Table 1. During 2008-09 the net worth of the Commonwealth general government sector decreased by \$47,880 million. This was the result of a GFS net operating balance (which reflects the change in net worth due to transactions) of -\$24,534 million combined with revaluations of -\$23,627 million. The key contributor to revaluations on the liabilities side was revaluations to unfunded superannuation and other employee entitlements (\$25,221 million). Revauations on the assets side of the statement were driven by equity (\$6,186 million) and other non-equity assets (\$4,684 million), offset by advances paid (-\$9,316 million).

 TABLE 1. COMMONWEALTH, General Government - Statement of Stocks and Flows Opening Stocks as at June 2008 Transactions Revaluations Other Volume Changes(a) Closing Stocks as at June 2009 \$m \$m \$m \$m \$m Assets Financial assets Cash and deposits 1 784 156 -318 - 1 622 Advances paid 33 159 7 905 -9 316 - 31 748 Investments, loans and placements 89 323 16 185 1 526 - 107 034 Other non-equity assets 42 138 - 4 684 - 46 822 Equity 43 970 9 6 186 - 50 165 Total 210 375 24 255 2 761 - 237 391 Non-financial assets Land and fixed assets 76 900 5 304 3 728 281 86 213 Other non-financial assets 219 1 635 -1 232 - 622 Total 77 118 6 938 2 496 281 86 835 Total 287 493 31 194 5 257 281 324 226 Liabilities Deposits held 3 179 209 360 - 3 748 Advances received - - - - - Borrowing 66 103 47 665 65 - 113 833 Unfunded superannuation and other employee entitlements 108 997 - 25 221 - 134 218 Other provisions 7 886 - 3 990 - 11 876 Other non-equity liabilities 21 341 7 855 -752 - 28 444 Total 207 506 55 729 28 884 - 292 119 GFS Net worth 79 987 -24 534 -23 627 281 32 107 Net debt -54 985 . . . . . . -22 823 Net financial worth 2 869 . . . . . . -54 728 . . not applicable - nil or rounded to zero (including null cells) (a) Source: Department of Finance and Deregulation, Consolidated Financial Statements for the Year Ended 30 June 2009, December 2009.

STATE AND LOCAL GENERAL GOVERNMENT - STATEMENT OF STOCKS AND FLOWS

14 Both the state and local general government Statements of Stocks and Flows (Table 2 and Table 3 respectively) highlight the significance of other economic flows. The net worth of state governments increased by \$61,526 million during 2008-09, driven by \$61,333 million from other economic flows. On the asset side the largest contributors were land and fixed assets (\$66,140 million) and Equity (\$22,763 million). The most significant contributor to liabilities was Unfunded superannuation and other employee entitlements (\$29,376 million).

15 The net worth of local government increased by \$25,119 million in 2008-09, driven by \$20,742 million from other economic flows. The largest contributor to assets was land and fixed assets (\$19,661 million).The most significant contributor to liabilities was other non-equity liabilities (\$25,726 million) which was offset by other provisions (-\$12,064 million).

 TABLE 2. STATE, General Government - Statement of Stocks and Flows Opening Stocks as at June 2008 Transactions Other Economic Flows Closing Stocks as at June 2009 \$m \$m \$m \$m Assets Financial assets Cash and deposits 13 266 1 347 -508 14 105 Advances paid 6 061 -96 -562 5 403 Investments, loans and placements 42 471 606 -447 42 630 Other non-equity assets 16 435 250 1 154 17 839 Equity 209 704 2 230 22 763 234 697 Total 287 937 4 336 22 401 314 674 Non-financial assets Land and fixed assets 404 099 9 886 66 140 480 125 Other non-financial assets 2 252 987 -1 300 1 939 Total 406 351 10 873 64 840 482 064 Total 694 288 15 210 87 240 796 738 Liabilities Deposits held 3 246 -91 -1 790 1 365 Advances received 3 309 -242 445 3 512 Borrowing 4 309 10 874 961 45 569 Unfunded superannuation and other employee entitlements 94 815 -145 29 376 124 046 Other provisions 6 900 - 601 7 501 Other non-equity liabilities 16 683 4 621 -3 688 17 616 Total 158 685 15 017 25 908 199 610 GFS Net worth 535 602 193 61 333 597 128 Net debt -21 510 . . . . -11 691 Net financial worth 129 252 . . . . 115 064 . . not applicable - nil or rounded to zero (including null cells)

 TABLE 3. LOCAL, General Government - Statement of Stocks and Flows Opening Stocks as at June 2008 Transactions Other Economic Flows Closing Stocks as at June 2009 \$m \$m \$m \$m Assets Financial assets Cash and deposits 6 128 1 110 -243 6 995 Advances paid 5 188 -189 4 Investments, loans and placements 6 477 23 -127 6 373 Other non-equity assets 2 563 -7 577 7 630 2 616 Equity 952 -1 760 1 869 1 061 Total 16 125 -8 016 8 941 17 050 Non-financial assets Land and fixed assets 245 978 4 438 19 661 270 077 Other non-financial assets 1 916 309 -244 1 981 Total 247 894 4 747 19 417 272 058 Total 264 020 -3 270 28 358 289 108 Liabilities Deposits held 603 24 5 632 Advances received 35 34 -35 34 Borrowing 6 554 -256 -178 6 120 Unfunded superannuation and other employee entitlements 2 192 6 087 -5 836 2 443 Other provisions 53 12 065 -12 064 54 Other non-equity liabilities 2 879 -25 602 25 726 3 003 Total 12 317 -7 647 7 616 12 286 GFS Net worth 251 703 4 377 20 742 276 822 Net debt -5 418 . . . . -6 587 Net financial worth 3 809 . . . . 4 764 . . not applicable

16 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 (cat. no. 5514.0) and Chapter 4 of the International Monetary Fund's Government Finance Statistics Manual 2001.