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1 The system of GFS is designed to provide statistical information on public sector entities in Australia classified in a uniform and systematic way. GFS enables policy makers and other users to analyse the financial operations and the financial position of the public sector at either the level of a specific government, sector, or a particular set of transactions. The system is based on international standards set out in the System of National Accounts 1993 (SNA93) and the International Monetary Fund's A Manual of Government Finance Statistics.
8 The analytical GFS measures are defined as follows:
9 The Surplus(+)/Deficit(-) measure described here is conceptually the same as the Deficit(+)/Surplus(-) used in the former cash-based GFS system. Note that there has been a reversal of the sign convention between the two systems. A 'surplus' in the accruals-based system is presented as a positive value. In practice, however, the Surplus(+)/Deficit(-) in the accruals-based GFS system has been derived using different methodologies which result in a break in the time series across the two systems. The Surplus(+)/Deficit(-) is the cash-based equivalent of the GFS Net Lending/Borrowing described above. Although the Surplus(+)/Deficit(-) is a cash-based measure and does not capture non-cash items such as accruing unfunded superannuation or depreciation, it does, however, include some items of a non-cash nature to avoid a large break in the continuity of this measure.
10 The net debt measure, previously published in the now discontinued publication Public Sector Financial Assets and Liabilities, Australia (cat. no. 5513.0), is included in the balance sheet presentation together with net financial worth, which is the difference between total financial assets and total liabilities. In GFS balance sheets, shares and other contributed capital are treated as liabilities by convention.
11 The main GFS classifications are described below:
SOURCES AND METHODS
12 The statistics shown in this release are based on information provided in, or underlying, the published accounting statements and reports of governments and their authorities plus additional dissections of reported transactions and balances. The valuation of stocks and flows in source data are valued in accordance with requirements specified in accounting standards, which generally do not require universal or continual application of current values.
13 For the Commonwealth government and state governments the primary data sources are:
14 For local government, the main data sources are annual statements of accounts and questionnaires completed by local authorities.
15 To compile statistics about the financial activities of a particular level of government, or any other grouping of public sector units, transactions and debtor/creditor relationships between units within the chosen grouping (sector or subsector) have to be matched and eliminated to avoid double counting. The process of matching and eliminating these items within the chosen group is known as consolidation.
16 Consolidation is particularly important at the state government level where a significant proportion of total expenses/payments are financed by Commonwealth government grants. Similarly, an appreciable part of the expenditure undertaken by state public non-financial corporations is financed by grants from state governments.
17 The statistics in this release have been compiled using standard definitions, classifications and treatment of government financial transactions to facilitate comparisons between levels of government and between states within a level of government.
18 However, the statistics also reflect real differences between the administrative and accounting arrangements of the various governments and these differences need to be taken into account when making interstate comparisons. For example, only a state level of government exists in the Australian Capital Territory and a number of functions performed by it are undertaken by local government authorities in other jurisdictions.
19 Interstate comparisons of data may also be significantly affected by differences in the mix of operations undertaken by state governments and local governments. For example:
RELATIONSHIP OF GFS TO OTHER INFORMATION
Uniform Presentation Framework
20 Following the May 1991 Premiers' Conference, the Commonwealth and the state governments resolved to implement a uniform presentation framework in their budget documents. The purpose of the uniform presentation framework was to introduce uniformity into the presentation of GFS so that users of the information could make valid comparisons between jurisdictions.
21 Australian governments have, since budget year 1992-93, presented information in their budget documents on the ABS GFS basis. The information presented in the budget documents of each jurisdiction is compiled with the advice and assistance of ABS officers and generally conforms with the standards applied by the ABS. Jurisdictions may present the information based on their interpretation of the GFS classifications, but must provide a reconciliation of this information with information reflecting the ABS decision on these issues. In 1999, the uniform presentation framework was revised from a cash to an accruals basis and the accrual uniform presentation framework was to be implemented beginning with most jurisdictions' Budgets for 2000-2001.
22 Variations between ABS statistics and those presented by the jurisdictions can exist because the ABS may:
23 The first two differences are generally minor, but the last difference can be significant.
Australian Accounting Standard 31 (AAS31)
24 AAS31 'Financial Reporting by Governments' has been adopted by most Australian governments in the preparation of their financial statements. Accounting reports prepared under AAS31 and statistical reports prepared on a GFS basis serve different purposes and are aimed at different sets of users. Thus, differences between GFS and AAS31 analytical measures (GFS net operating balance and AAS31 operating surplus/deficit for example) can be expected. Because of this, reconciliation statements identifying the differences are provided in this release. Descriptions of GFS/AAS31 reconciliations are outlined in Section 6 of the ABS publication Information Paper: Accruals-based Government Finance Statistics (cat. no. 5517.0).
Australian System of National Accounts (ASNA)
25 While GFS and ASNA share the same conceptual framework (SNA93), there are methodological differences between GFS and ASNA analytical measures (GFS and ASNA net worth and net lending/borrowing for example). The main differences in the net/lending borrowing measures relate to adjustments for market rates of interest, consumption of fixed capital and ownership transfer costs between the GFS and ASNA. Descriptions of GFS/ASNA reconciliations are outlined in Section 6 of the ABS publication Information Paper: Accruals-based Government Finance Statistics (cat. no. 5517.0).
RELATED PUBLICATIONS AND PRODUCTS
26 Users may refer to the following publications which contain related information:
Australian National Accounts: Financial Accounts (cat. no. 5232.0) - issued quarterly
Australian System of National Accounts (cat. no. 5204.0) - issued annually
Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) - issued quarterly
Government Finance Statistics (cat. no. 5512.0) - issued annually
Government Finance Statistics: Concepts, Sources and Methods (cat. no. 5514.0) - latest edition 1994
Information Paper: Developments in Government Finance Statistics (cat. no. 5516.0) - issued February 1997
Information Paper: Accruals-based Government Finance Statistics (cat. no. 5517.0) - issued March 2000
Statistical Concepts Library - issued April 2000 on CD-ROM and now available on ABS website. Changes to material included on the web are updated as they become available. A CD-ROM is available by special order and will be a "snapshot" of the web material at the time the order is received.
Taxation Revenue, Australia (cat. no. 5506.0) - issued annually
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