5519.0.55.001 - Government Finance Statistics, Australia, Quarterly, Electronic Delivery, Mar 2006  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 06/06/2006   
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1 The main functions of government are the provision of non-market services, the regulation of economic and social conditions, and the redistribution of income between sections of the community. These activities are primarily financed by taxation and are carried out by entities in the general government sector. In addition to this core activity, governments can also own or control enterprises that sell goods or services to the public and which operate largely on a market basis (public non-financial corporations) or engage in financial intermediation (public financial corporations).

2 The term 'government finance statistics' refers to statistics that measure the financial activities of governments and reflect the impact of those activities on other sectors of the economy. The Australian system of Government Finance Statistics (GFS), which is used to derive the statistics presented here, is designed to provide statistical information on public sector entities in Australia classified in a uniform and systematic way.

3 GFS enables policy makers and users to analyse the financial operations and financial position of the public sector at either the level of a specific government, institutional sector or 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 Government Finance Statistics Manual 2001 (GFSM2001).

4 Annual GFS are presented in the form of operating statements, cash flow statements and balance sheets. For the quarterly GFS electronic release, GFS tables are shown for operating statements only and therefore the only GFS balances available quarterly are Net operating balance and Net lending/borrowing.

5 Users analysing accrual based GFS publications should refer to Government Finance Statistics, Australia: Concepts, Sources and Methods (cat. no. 5514.0) available on the ABS Website.


6 The system of GFS provides details of revenues, expenses, cash flows and assets and liabilities of the Australian public sector and comprises units which are owned and/or controlled by the Commonwealth, state and local governments. These units are grouped as follows:

  • General Government
  • Public Non-financial Corporations
  • Non-financial Public Sector
  • Public Financial Corporations
  • Total Public Sector

This quarterly GFS electronic release presents statistics on revenues and expenses for the general government sector and public non-financial corporations sector.

General Government

7 The principal function of General Government entities is to provide non-market goods and services (e.g. roads, 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.

8 This institutional sector covers the departments of the Commonwealth Government, state governments and local government municipalities. It also includes agencies and government authorities under departmental administration which are engaged in the provision of public administration, defence, law enforcement, welfare, public education, and health. Also included are non-departmental bodies which independently perform the government functions of regulation (e.g. Nurses Registration Boards and the Maritime Safety Authority), provision of non-market services (e.g. the Australian Broadcasting Corporation), and redistribution of income. Some of these bodies may be corporations, but they are still considered part of the general government sector if they perform general government functions. Universities are also considered part of the general government sector.

9 Unincorporated government enterprises which provide goods and services to their governments and to the public at prices that are not economically significant are also included in this sector. In addition, government quasi-corporations which sell their output exclusively to other government units, while not in open competition with other producers, are also classified as general government units.

Public Non-financial Corporations

10 The main function of public non-financial corporations (PNFCs) is to provide goods and services which are predominantly market, non-regulatory and non-financial in nature, and financed through sales to consumers of these goods and services.

11 Enterprises in the PNFCs sector differ from those in the general government sector in that all or most of their production costs are recovered from consumers, rather than being financed from the general taxation revenue of government. Some enterprises, however, do receive subsidies to make up for shortfalls incurred as a result of government policy, for example, in the provision of 'community service obligations' at concessional rates.

12 PNFCs vary in their degree of 'commercialisation', from those which are quite heavily reliant on parent governments for subsidies, such as rail and bus transport undertakings, to those which are net contributors to government revenue. Governments may exercise control over PNFCs by either owning more than 50% of the voting stock or otherwise controlling more than half the shareholders' voting power, or through legislation, decree or regulation which empowers the government to determine corporate policy or to appoint the directors. Examples of PNFCs are Telstra, Australia Post, state rail authorities, and local bus and transport operations.

GFS measures

13 The principal analytical GFS measures shown in this electronic release are defined as follows:
  • GFS Net Operating Balance - the difference between total GFS revenues and total GFS expenses. This measure reflects the sustainability of government operations and is equivalent to the change in net worth arising from transactions.
  • GFS Net Lending/Borrowing - is the financing requirement of government, calculated as the GFS Net operating balance less the net acquisitions of non-financial assets. A positive result reflects a net lending position and a negative result reflects a net borrowing position.


14 The public sector comprises all organisations owned or controlled by any of the four levels of government within the Australian political system; Commonwealth, state, local, and multi-jurisdictional. In this electronic release, statistics for the multi-jurisdictional sector are not shown separately but have been included in calculating the All levels of government tables.

Commonwealth Government

15 The Commonwealth Government has exclusive responsibility under the Constitution for the administration of a wide range of functions including defence, foreign affairs and trade, and immigration. A distinctive feature of the Australian federal system is that the Commonwealth Government levies and collects all income tax, from individuals as well as from enterprises. It also collects a significant portion of other taxes, including taxes on the provision of goods and services. The Commonwealth Government distributes part of this revenue to other levels of government, principally the states.

State Governments

16 State and territory governments (referred to as 'state' governments) perform the full range of government functions, other than those the Constitution deems the exclusive domain of the Commonwealth government. The functions mainly administered by state governments include public order, health, education, administration, transport and maintenance of infrastructure. The revenue base of state governments consists of taxes on property, on employers' payrolls, and on the provision and use of goods and services. This revenue base is supplemented by grants from the Commonwealth government, which includes an allocation of Goods and Services Tax (GST) revenue.

Local Governments

17 Local government authorities govern areas typically described as cities, towns, shires, boroughs, municipalities and district councils. Although the range of functions undertaken by local governments varies between the different jurisdictions, their powers and responsibilities are generally similar and cover such matters as:
  • the construction and maintenance of roads, streets and bridges;
  • water, sewerage and drainage systems;
  • health and sanitary services;
  • the regulation of building standards; and
  • the administration of regulations relating to items such as slaughtering, weights and measures, and registration of dogs.

18 Local governments also provide transport facilities, hospitals, charitable institutions, recreation grounds, parks, swimming pools, libraries, museums and other business undertakings. Local governments' own-source revenue is derived mainly from property taxes. They also rely on grants from the Commonwealth government and their parent state governments. The Australian Capital Territory has no separate local government.


19 The multi-jurisdictional sector contains units where jurisdiction is shared between two or more governments, or classification of a unit to a jurisdiction is otherwise unclear. The main type of units currently falling into this category are the public universities.


Main Classifications

20 The main GFS classification underlying the quarterly results is the Economic Type Framework - this is the main classification of stocks and flows. The Economic Type Framework resembles a set of financial statements, with sections for an operating statement, a cash flow statement and a balance sheet. In addition, there are sections to cater for the reconciliation of accounting net operating result measures with cash flows from operating activities and to capture items like assets acquired under finance leases, intra-unit transfers, and revaluations and other changes in the volume of assets.

21 More details on the classifications used in compiling GFS are available in Government Finance Statistics, Australia: Concepts, Sources and Methods (cat. no. 5514.0).


Data sources

22 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. The valuation of stocks and flows in source data are generally valued in accordance with requirements specified in accounting standards, which generally do not require universal or continual application of market values. However, for the most part, the divergences between the accounting values and market values are not materially significant. Exceptions occur for some interest flows and depreciation.

23 For the general government sector for the Commonwealth government and all state governments except South Australia, the primary quarterly data sources are public accounts and budget management systems of state treasuries and the Australian Department of Finance. For South Australia, quarterly GFS is collected from an ABS survey of the largest state government departments. For the public non-financial corporation sector, GFS is also collected from a survey of the largest corporations in several jurisdictions where the relevant treasury does not provide that data as part of its accounting reporting.

24 For local government, the main data source is a quarterly GFS survey of local governments from all jurisdictions. There are no local government bodies in the ACT.


25 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.

26 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.


27 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.

28 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.


Uniform Presentation Framework

29 Following the May 1991 Premiers' Conference, the Commonwealth government 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.

30 Since budget year 1992-93 the Commonwealth and state governments have 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 treatment 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 2000-01.

31 Variations between ABS statistics and those presented by the jurisdictions can exist because the ABS may:
  • disagree with classification treatments applied by jurisdictions;
  • employ a different consolidation methodology to those used in jurisdiction treasuries;
  • apply reconciliation adjustments when it consolidates data for all jurisdictions and compares annual data with quarterly data used in compiling the national accounts; and
  • include data which were not available when a jurisdiction's GFS presentations were published (e.g. major asset sales).

32 Differences caused as a result of the first three points above are generally minor. However, differences attributable to the last point can be significant.

Australian Accounting Standard 31 (AAS31)

33 AAS31 'Financial Reporting by Governments' has been adopted by all 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. Descriptions of GFS/AAS31 reconciliations are outlined in Chapter 7 of Government Finance Statistics, Australia: Concepts, Sources and Methods (cat.no.5514.0).

Australian System of National Accounts (ASNA)

34 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).

35 Not all public sector ASNA measures are wholly extracted from GFS. For example, the relationship between the two statistical systems for Government final consumption expenditure is defined as follows:

GFS Gross operating expenses
GFS Sales of goods and services
GFS Depreciation
Consumption of fixed capital
FISIM adjustment
Intangibles adjustment
ASNA Government final consumption expenditure

36 In the reconciliation above, GFS depreciation is an accounting measure and does not align well with the economic measure of Consumption of fixed capital.

37 Financial Intermediation Services Indirectly Measured (FISIM) measures the service implicitly provided by financial intermediaries, such as banks, on deposit and loan facilities. It is measured as the difference between the interest rates on loans and deposits and a pure or reference rate of interest, multiplied by the level of loans and deposits, respectively.

38 Intangibles refers to patents, copyrights, mineral concessions, and similar non-physical non-financial assets. In the ASNA, expenditures on these assets are capitalised and therefore not recorded as consumption expenditure.

39 The chain volume measures appearing in this quarterly publication are annually-reweighted chain Laspeyres indexes referenced to the current price values in a chosen reference year. The measures are compiled by linking together (compounding) movements in volumes, calculated using the average prices of the previous financial year, and applying the compounded movements to the current price estimates of the reference year.

40 Taxation revenue. In GFS, Commonwealth government taxation revenue is recorded using the tax liability method, under which revenue is measured when a liability to pay tax arises from an assessment process. This is considered to be the most reliable basis for GFS reporting. In the national accounts, on the other hand, tax revenue is recorded when the taxpayer performs the underlying economic activity that gives rise to a tax liability. This method requires estimation and is less reliable, but is considered to be the most appropriate method in the national accounting context.

41 Seasonal adjustment. Data that are affected by seasonal factors are adjusted to remove the effects of these factors. Seasonally adjusted chain volume estimates are calculated from seasonally adjusted estimates expressed in the prices of the previous year. As with original volume data, the seasonally adjusted chain volume measures are benchmarked to annual original estimates. As a consequence, the seasonally adjusted chain volume measures sum to the corresponding annual original figures - unlike their current price counterparts.

42 Revisions. Revisions are made to the quarterly GFS data each quarter as required as a result of new and updated information available from jurisdictions.


43 Users may refer to the following publications which contain related information:

Australian National Accounts: Concepts, Sources and Methods (cat. no. 5216.0) - available in electronic form on the ABS Website via the Statistical Concepts Library.
Australian National Accounts: Financial Accounts (cat. no. 5232.0) - issued quarterly
Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) - issued quarterly
Australian System of National Accounts (cat. no. 5204.0) - issued annually
Government Finance Statistics, Australia (cat. no. 5512.0) - issued annually
Government Finance Statistics: Concepts, Sources and Methods (cat. no. 5514.0)
Information Paper: Accruals-based Government Finance Statistics (cat. no. 5517.0) - issued March 2000
Taxation Revenue, Australia (cat. no. 5506.0) - issued annually