5501.5.55.001 - Government Financial Estimates, Western Australia, Electronic Delivery, 2002-03  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 26/07/2002   
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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.

2 GFS are presented in the form of operating statements, balance sheets, cash flow statements and reconciliation statements. GFS analytical measures included are net operating balance, net lending/borrowing, net worth, change in net worth, and surplus/deficit (for descriptions, see paragraph 7 of these notes).

3 Prior to 1998-99, GFS were compiled on a cash basis. Users should note that the move to an accrual basis of recording has required a change in data sources and methodologies for some jurisdictions from 1998-99 onwards. Therefore, the surplus/deficit series from 1998-99 are not directly comparable to the 'deficit' series for earlier years previously published in GFS publications.


4 An Information Paper (Information Paper: Accruals-based Government Finance Statistics (cat. no. 5517.0)) aimed at helping users understand the statistics presented in this release was issued on 13 March 2000. That information paper outlines the conceptual changes which have been implemented in moving from a cash to an accrual basis of recording.

5 Users analysing previous cash based GFS publications should refer to Government Finance Statistics, Australia: Concepts, Sources and Methods (cat. no. 5514.0), which relates to cash based GFS. An accrual GFS version of this manual is expected to be available on the ABS web site later this year.

6 The central feature of the new accruals GFS conceptual framework is that it is based on an integrated recording of stocks and flows. Stocks refer to the holdings of assets and liabilities at a point in time which are valued at current market prices. Flows are economic events and other occurrences, recorded in the period in which they occur, that cause changes in the value of stocks through the creation, transformation, exchange, transfer or extinction of value. Thus, the stock of assets and liabilities recorded at the beginning of a period changes as a result of flows during the period, moving to new levels at the end of the period.


7 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 - a sector which includes all of the agencies of government such as government departments, offices and other bodies engaged in providing services free of charge or at prices significantly below their cost of production and non-market nonprofit institutions which are controlled and mainly financed by government.
  • Public Non-financial Corporations - a subsector comprising public sector corporations which are mainly engaged in providing market non-financial goods and services. Includes corporations which aim at covering most of their expenses from revenue.
  • Public Financial Corporations - a subsector comprising public sector corporations which are engaged in providing financial intermediation services or auxiliary financial services. Central Borrowing Authorities of state governments are included in this subsector; and
  • Non-financial Public Sector - a subsector formed by the consolidation of the General Government and Public Non-financial Corporation sectors.
  • Total Public Sector - the consolidated total of the General Government, Public Non-financial Corporations and Public Financial Corporations sectors.

GFS measures

8 The analytical GFS measures are defined as follows:
  • Net Operating Balance - the difference between GFS revenues and GFS expenses. This measure reflects the sustainability of government operations.
  • Net Lending/Borrowing - this is equal to net operating balance minus the total net acquisition of non-financial assets. A positive result reflects a net lending position and a negative result reflects a net borrowing position.
  • Net Worth - is an economic measure of 'wealth' calculated as assets less liabilities for the general government sector and as assets less liabilities less shares and other contributed capital for the public non-financial corporation and public financial corporation sectors. GFS net worth of unlisted corporations will always be zero because owners' equity (shares and other contributed capital) is taken to be the difference between total assets and liabilities. GFS net worth for listed corporations will be positive or negative depending upon the difference between the value of shares carried on balance sheet and the value of traded shares. As the equity of public non-financial corporations and public financial corporations held by the general government sector consolidate out at total public sector level, only equity held outside the public sector will appear in the consolidated balance sheets.
  • Change in Net Worth - this is the change in net worth between two periods. Change in net worth due to transactions is also equivalent to the net operating balance and excludes the impact of revaluations and other changes in volume of assets and liabilities.
  • Surplus/Deficit - this cash-based measure is calculated as:
Net Cash flows from operating activities
plus Net cash flows from investments in non-financial assets
less Distributions paid
less Acquisitions of assets under finance leases and similar arrangements.

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.


Main Classifications

11 The main GFS classifications are described below:
  • 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.
  • Type of Asset Classification - this classification is used to identify whether expenditure on non-financial assets (net) was on produced assets (e.g. dwellings and transport equipment) and non-produced assets (e.g. land). In accordance with SNA93 requirements, this classification distinguishes between produced (tangible and intangible) and non-produced (tangible and intangible) assets.
  • Government Purpose Classification - this classification is used to group operating expenses and expenditure by purpose (education, health, etc.) with similar functions to facilitate the study of the broad function of public sector spending and the effectiveness of this spending in meeting government policy objectives.
  • Taxes Classification - this classification dissects this major form of government revenue according to type of tax collected.
  • Source/Destination Classification - this classification identifies selected flows and stocks between units within and outside the public sector and this information is used in compiling consolidated statistics.


Data sources

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:

  • public accounts and budget management systems of state Treasuries and the Commonwealth Department of Finance and Administration;
  • annual reports of departments and authorities;
  • budget papers; and
  • reports of Auditors-General.

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:
  • water and sewerage undertakings in Victoria, Western Australia and South Australia are operated exclusively by state authorities, but are run by local governments in other jurisdictions; and
  • government transport undertakings are operated exclusively by state authorities in all states except Queensland where bus transport is operated by the local government sector.


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:
  • 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 from time to time which were not available when a jurisdiction's GFS presentations were published (e.g. major asset sales).

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).


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