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1301.0 - Year Book Australia, 2009–10  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 04/06/2010   
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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 (see Chapter 4 - Government of this edition of Year Book Australia for further discussion on this matter) 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 which group organisations with similar characteristics:

  • General government - the main function of general government entities is to provide non-market goods and services (e.g. public roads, public 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. Market operators make decisions about what to produce and how much to produce in response to expected levels of demand and expected costs of supply and are exposed to the risks associated with this production.
  • 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 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 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 considered an integral function of accrual accounting.

The cash based 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, 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 financial position for a sector at a specific point in time. It shows the 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.

Tables 28.1 and 28.2 present the 2007-08 general government and total public sector operating statements. Tables 28.3 and 28.4 present the 2007-08 cash flow statements. Table 28.5 and 28.6 present the balance sheets for June 2008.

28.1 GENERAL GOVERNMENT OPERATING STATEMENT - 2007-08

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

GFS Revenue
303 291
161 248
27 076
17 031
417 391
GFS Expenses
279 987
157 252
23 983
15 774
387 880
GFS Net Operating Balance
23 304
3 996
3 093
1 257
29 512
Net acquisition of non-financial assets
1 973
8 304
3 752
977
15 007
GFS Net Lending(+)/Borrowing(-)
21 330
-4 308
-659
280
14 505

(a) Includes Northern Territory and Australian Capital Territory.
(b) Contains units where jurisdiction is shared between two or more governments, or classification is unclear. Main units in this category are the public universities.
(c) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: ABS Government Finance Statistics, Australia (5512.0).

28.2 TOTAL PUBLIC SECTOR OPERATING STATEMENT - 2007-08

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

GFS Revenue
314 626
201 298
27 119
17 687
468 344
GFS Expenses
289 615
195 332
24 017
16 268
434 989
GFS Net Operating Balance
25 011
5 966
3 102
1 418
33 355
Net acquisition of non-financial assets
2 720
22 583
3 777
982
30 062
GFS Net Lending(+)/Borrowing(-)
22 291
-16 617
-676
436
3 292

(a) Includes Northern Territory and Australian Capital Territory.
(b) Contains units where jurisdiction is shared between two or more governments, or classification is unclear. Main units in this category are the public universities.
(c) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: ABS Government Finance Statistics, Australia (5512.0).

28.3 GENERAL GOVERNMENT CASH FLOW STATEMENT - 2007-08

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

Cash receipts from operating activities
294 494
164 913
25 700
17 235
411 773
Cash payments for operating activities
-267 735
-152 223
-19 484
-14 977
-365 287
Net cash flows from operating activities
26 759
12 690
6 216
2 258
46 486
Net cash flows from investments in non-financial assets
-3 636
-14 891
-6 932
-1 884
-27 344
Net cash flows from investments in financial assets for policy purposes
5 108
-503
341
70
5 227
Net cash flows from investments in financial
assets for liquidity purposes
-29 303
2 902
47
-491
-26 846
Net cash flows from financing activities
1 748
3 453
813
349
7 690
Net Increase(+)/Decrease(-) in Cash Held
675
3 651
485
301
5 213
Net cash flows from operating activities and net cash flow from investments in non-financial assets
23 123
-2 202
-715
373
19 142
Acquisitions of assets under finance leases and similar arrangements
-148
-1 068
3
-
-1 203
Surplus(+)/Deficit(-)
22 974
-3 269
-712
373
17 939

- nil or rounded to zero (including null cells)
(a) Includes Northern Territory and Australian Capital Territory.
(b) Contains units where jurisdiction is shared between two or more governments, or classification is unclear. Main units in this category are the public universities.
(c) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: ABS Government Finance Statistics, Australia (5512.0).

28.4 TOTAL PUBLIC SECTOR CASH FLOW STATEMENT - 2007-08

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

Cash receipts from operating activities
304 484
208 803
25 738
17 999
465 823
Cash payments for operating activities
-275 458
-187 988
-19 488
-15 534
-408 713
Net cash flows from operating activities
29 025
20 815
6 250
2 465
57 110
Net cash flows from investments in non-financial assets
-4 690
-34 009
-6 986
-1 939
-47 624
Net cash flows from investments in financial assets for policy purposes
2 978
186
375
70
3 816
Net cash flows from investments in financial assets for liquidity purposes
-31 263
1 507
47
-491
-29 138
Net cash flows from financing activities
4 923
15 780
813
216
21 929
Net Increase(+)/Decrease(-) in Cash Held
973
4 278
499
320
6 094
Net cash flows from operating activities and net cash flow from investments in non-financial assets
24 335
-13 188
-735
526
9 492
Acquisitions of assets under finance leases and similar arrangements
-149
-1 420
3
-
-1 556
Surplus(+)/Deficit(-)
24 186
-14 609
-732
526
7 936

- nil or rounded to zero (including null cells)
(a) Includes Northern Territory and Australian Capital Territory.
(b) Contains units where jurisdiction is shared between two or more governments, or classification is unclear. Main units in this category are the public universities.
(c) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
Source: ABS Government Finance Statistics, Australia (5512.0).

28.5 GENERAL GOVERNMENT BALANCE SHEET - 30 June 2008

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

Assets
Finanical assets
197 280
288 647
16 515
13 658
506 193
Non-financial assets
53 381
406 488
245 060
29 201
734 130
Total
250 661
695 135
261 575
42 859
1 240 323
Liabilities
207 506
156 954
12 462
10 751
377 765
GFS Net Worth
43 155
538 181
249 113
32 108
862 558
Net debt(d)
-46 808
-23 754
-5 909
-5 475
-81 946
Net financial worth(e)
-10 226
131 693
4 053
2 907
128 428

(a) Includes Northern Territory and Australian Capital Territory.
(b) Contains units where jurisdiction is shared between two or more governments, or classification is unclear. Main units in this category are the public universities.
(c) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
(d) Equals deposits held, advances received, Reserve Bank of Australia notes on issue and borrowings less cash and deposits, advances paid, investments, loans and placements.
(e) Equals 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 assests and liabilities.
Source: ABS Government Finance Statistics, Australia (5512.0).

28.6 TOTAL PUBLIC SECTOR BALANCE SHEET - 30 June 2008

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

Assets
Finanical assets
288 321
171 339
15 723
13 862
468 142
Non-financial assets
59 356
678 536
245 994
31 393
1 014 954
Total
347 677
849 876
261 717
45 255
1 483 096
Liabilities
304 522
311 694
12 604
11 757
620 538
Shares and other contributed capital
-
-
-
1 390
-
GFS Net Worth
43 155
538 181
249 113
32 108
862 558
Net debt(d)
-62 447
4 302
5 822
-4 555
-68 522
Net financial worth(e)
-16 202
-140 355
3 119
716
-152 397

- nil or rounded to zero (including null cells)
(a) Includes Northern Territory and Australian Capital Territory.
(b) Contains units where jurisdiction is shared between two or more governments, or classification is unclear. Main units in this category are the public universities.
(c) The sum of individual levels of government may not agree with All levels of government figures due to transfers between levels of government.
(d) Equals deposits held, advances received, Reserve Bank of Australia notes on issue and borrowings less cash and deposits, advances paid, investments, loans and placements.
(e) Equals 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 assests and liabilities.
Source: ABS Government Finance Statistics, Australia (5512.0).




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