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STATEMENT OF STOCKS AND FLOWS


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.

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.

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.

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.

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').

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.

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.

TABLE 1, STATEMENT OF STOCKS AND FLOWS, General Government Sector, Commonwealth
			Opening stocks as at 1 July 2015	Transactions	Revaluations	Other volume changes(a)	Closing stocks as at 30 June 2016
			$m	$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	3 156	482	-	-	3 638
		Advances paid	46 053	5 526	664	-	52 243
		Investments, loans and placements	136 377	5 255	8 363	-	149 995
		Other non-equity assets	62 953	-	3 217	-	66 170
		Equity	83 509	7 158	-3 421	-	87 246
		Total financial assets	332 048	18 421	8 822	-	359 291
	Non-financial assets
		Land and fixed assets	120 635	1 335	6 723	283	128 976
		Other non-financial assets	2 767	2 147	-1 841	-	3 073
		Total non-financial assets	123 401	3 482	4 884	283	132 050
Total assets			455 450	21 902	13 706	283	491 341
less
Liabilities
	Deposits held		4 070	145	-5	-	4 210
	Advances received		-	-	-	-	-
	Borrowing		423 854	57 132	20 807	-	501 793
	Unfunded superannuation and other employee entitlements		265 261	-	67 268	-	332 529
	Other provisions		10 522	-	1 813	-	12 335
	Other non-equity liabilities		38 881	25	4 921	-	43 827
	Total liabilities		742 588	57 301	94 804	-	894 693
equals
GFS Net worth			-287 139	-35 254	-81 242	283	-403 352
Net debt			242 338	. .	. .	. .	300 127
Net financial worth			-410 540	. .	. .	. .	-535 402
. . not applicable
- nil or rounded to zero (including null cells)
(a) Source: Department of Finance, Consolidated Financial Statements for the Year Ended 30 June 2016, December 2016.

TABLE 2, STATEMENT OF STOCKS AND FLOWS, General Government Sector, State Government
			Opening stocks as at 1 July 2015	Transactions	Other Economic Flows	Closing stocks at 30 June 2016
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	22 398	-6 427	-317	15 654
		Advances paid	10 016	146	-162	10 000
		Investments, loans and placements	64 906	9 534	278	74 718
		Other non-equity assets	28 387	217	-3 433	25 171
		Equity	299 057	-5 960	17 170	310 267
		Total financial assets	424 763	-2 490	13 536	435 809
	Non-financial assets
		Land and fixed assets	604 950	9 138	31 604	645 692
		Other non-financial assets	3 444	1 400	-525	4 319
		Total non-financial assets	608 395	10 538	31 077	650 010
Total assets			1 033 158	8 048	44 614	1 085 820
less
Liabilities
	Deposits held		3 019	381	-7	3 393
	Advances received		3 945	-5	16	3 956
	Borrowing		134 471	-2 885	8	131 594
	Unfunded superannuation and other employee entitlements		176 679	-8	29 738	206 409
	Other provisions		11 400	-	468	11 868
	Other non-equity liabilities		22 320	3 543	-2 762	23 101
	Total liabilities		351 834	1 026	27 461	380 321
equals
GFS Net worth			681 324	7 022	17 153	705 499
Net debt			44 115	. .	. .	38 572
Net financial worth			72 930	. .	. .	55 488
. . not applicable
- nil or rounded to zero (including null cells)

TABLE 3, STATEMENT OF STOCKS AND FLOWS, General Government Sector, Local Government
			Opening stocks as at 1 July 2015	Transactions	Other Economic Flows	Closing stocks at 30 June 2016
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	10 503	165	205	10 873
		Advances paid	35	-1	1	35
		Investments, loans and placements	11 903	1 375	-526	12 752
		Other non-equity assets	3 736	-412	621	3 945
		Equity	7 500	-50	-292	7 158
		Total financial assets	33 678	1 076	8	34 762
	Non-financial assets
		Land and fixed assets	383 824	5 892	16 656	406 372
		Other non-financial assets	1 557	146	-23	1 680
		Total non-financial assets	385 381	6 037	16 634	408 052
Total assets			419 059	7 114	16 642	442 815
less
Liabilities
	Deposits held		502	27	24	553
	Advances received		18	6	-	24
	Borrowing		11 818	-462	-390	10 966
	Unfunded superannuation and other employee entitlements		3 286	197	-53	3 430
	Other provisions		127	108	-108	127
	Other non-equity liabilities		4 202	-536	798	4 464
	Total liabilities		19 953	-660	271	19 564
equals
GFS Net worth			399 106	7 774	16 370	423 250
Net debt			-10 103	. .	. .	-12 117
Net financial worth			13 725	. .	. .	15 198
. . not applicable
- nil or rounded to zero (including null cells)