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5512.0 - Government Finance Statistics, Australia, 2008-09 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/04/2010   
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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.



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