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5512.0 - Government Finance Statistics, Australia, 2011-12 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 30/04/2013   
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STATEMENT OF STOCKS AND FLOWS, 2011–12


1 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.

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 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 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

11 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.

12 The statement of stocks and flows for the Commonwealth general government sector is presented in Table 1. During 201112 the net worth of the Commonwealth general government sector decreased by $150,894m. This was the result of a GFS net operating balance (which reflects the change in net worth due to transactions) of –$39,017m combined with revaluations of –$112,458m offset by other volume changes of $581m. The key contributor was revaluations on the liabilities side which was driven by unfunded superannuation and other employee entitlements ($93,208m), and borrowing ($21,439m). Revaluations on the assets side of the statement were less significant and driven by other non–equity assets ($4,246m) and land and fixed assets ($3,381m).

TABLE 1. COMMONWEALTH, General Government – Statement of Stocks and Flows

Opening Stocks as at 1 July 2011
Transactions
Revaluations
Other Volume Changes(a)
Closing Stocks as at 30 June 2012
$m
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
2 435
160
–116
2 479
Advances paid
30 701
3 987
–726
33 962
Investments, loans and placements
98 675
–1 031
848
98 492
Other non–equity assets
52 862
4 246
57 108
Equity
50 355
1 879
–2 196
50 038
Total
235 029
4 995
2 055
242 079
Non–financial assets
Land and fixed assets
89 037
2 632
3 381
581
95 631
Other non–financial assets
1 759
2 541
–2 084
2 216
Total
90 796
5 173
1 297
581
97 847
Total
325 825
10 168
3 352
581
339 926
Liabilities
Deposits held
3 614
91
–4
3 701
Advances received
Borrowing
212 305
46 154
21 439
279 898
Unfunded superannuation and other employee entitlements
156 649
93 208
249 857
Other provisions
12 440
1 486
13 926
Other non–equity liabilities
40 238
3 047
–427
42 858
Total
425 247
49 293
115 701
590 241
GFS Net worth
–99 421
–39 017
–112 458
581
–250 315
Net debt
84 108
. .
. .
. .
148 666
Net financial worth
–190 218
. .
. .
. .
–348 162

. . 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 2012, December 2012.



STATE AND LOCAL GENERAL GOVERNMENT – STATEMENT OF STOCKS AND FLOWS

13 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. During 201112 the net worth of the state general government sector decreased by $46,501m, driven by –$47,518m from other economic flows. The key contributor was other economic flows on the liabilities side which was driven by unfunded superannuation and other employee entitlements ($44,857m). On the assets side, the main contributors to other economic flows were land and fixed assets ($10,767m) offset by equity (–$9,957m) and cash and deposits (–$2,657m).

14 The net worth of the local general government sector increased by $14,907m in 2011–12. Other economic flows contributed $8,602m to this movement.

TABLE 2. STATE, General Government – Statement of Stocks and Flows

Opening Stocks as at 1 July 2011
Transactions
Other Economic Flows
Closing Stocks as at 30 June 2012
$m
$m
$m
$m

Assets
Financial assets
 Cash and deposits
17 935
471
–2 657
15 749
 Advances paid
6 053
–31
1 037
7 059
Investments, loans and placements
53 197
1 275
1 188
55 660
Other non–equity assets
21 401
268
–383
21 286
Equity
266 301
1 274
–9 957
257 618
Total
364 887
3 257
–10 773
357 371
Non–financial assets
Land and fixed assets
535 675
13 171
10 767
559 613
Other non–financial assets
2 064
1 526
–1 526
2 064
Total
537 740
14 698
9 239
561 677
Total
902 627
17 955
–1 533
919 049
Liabilities
Deposits held
3 905
391
129
4 425
Advances received
3 388
–52
–14
3 322
Borrowing
80 746
16 767
–190
97 323
Unfunded superannuation and other employee entitlements
136 036
–123
44 857
180 770
Other provisions
8 360
673
9 033
Other non–equity liabilities
19 981
–46
531
20 466
Total
252 416
16 937
45 986
315 339
GFS Net worth
650 211
1 017
–47 518
603 710
Net debt
10 853
. .
. .
26 603
Net financial worth
112 472
. .
. .
42 032

. . not applicable
– nil or rounded to zero (including null cells)

TABLE 3. LOCAL, General Government – Statement of Stocks and Flows

Opening Stocks as at 1 July 2011
Transactions
Other Economic Flows
Closing Stocks as at 30 June 2012
$m
$m
$m
$m

Assets
Financial assets
Cash and deposits
8 251
1 055
–273
9 033
Advances paid
16
25
–22
19
Investments, loans and placements
11 269
249
353
11 871
Other non–equity assets
3 487
251
–207
3 531
Equity
8 942
8
69
9 019
Total
31 964
1 588
–80
33 472
Non–financial assets
Land and fixed assets
299 334
4 593
10 528
314 455
Other non–financial assets
1 641
181
38
1 860
Total
300 976
4 774
10 565
316 315
Total
332 940
6 362
10 486
349 788
Liabilities
Deposits held
420
26
–15
431
Advances received
23
–1
–1
21
Borrowing
9 066
924
74
10 064
Unfunded superannuation and other employee entitlements
2 781
362
327
3 470
Other provisions
328
162
–134
356
Other non–equity liabilities
3 664
–1 417
1 633
3 880
Total
16 282
56
1 885
18 223
GFS Net worth
316 658
6 305
8 602
331 565
Net debt
–10 027
. .
. .
–10 405
Net financial worth
15 682
. .
. .
15 249

. . not applicable


15 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. 5514.0.55.001) electronic version or (cat. no. 5514.0) pdf version and Chapter 4 of the International Monetary Fund's Government Finance Statistics Manual 2001.

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