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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 2016	Transactions	Revaluations	Other volume changes(a)	Closing stocks as at 30 June 2017
			$m	$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	3 638	1 503	-1	-	5 140
		Advances paid	52 243	6 115	-11 254	-	47 104
		Investments, loans and placements	149 995	37 318	5 938	-	193 251
		Other non-equity assets	66 033	-	2 175	-	68 208
		Equity	87 244	73 86	-4 618	-	90 012
		Total financial assets	359 152	52 322	-7 759	-	403 715
	Non-financial assets
		Land and fixed assets	128 976	1 478	2 239	-	132 693
		Other non-financial assets	3 073	1 590	-1 399	-	3 264
		Total non-financial assets	132 050	3 068	838	-	135 956
Total assets			491 202	55 390	-6 921	-	539 671
less
Liabilities
	Deposits held		10 005	104	-222	-	9 887
	Advances received		-	-	-	-	-
	Borrowing		495 998	84 908	-21 071	-	559 835
	Unfunded superannuation and other employee entitlements		332 529	-	-34 937	-	297 592
	Other provisions		12 335	-	6 671	-	19 006
	Other non-equity liabilities		42 785	2 921	-8 537	-	37 169
	Total liabilities		893 651	87 933	-58 095	-	923 489
equals
GFS Net worth			-402 449	-32 436	51 067	-	-383 818
Net debt			300 127	. .	. .	. .	324 228
Net financial worth			-534 499	. .	. .	. .	-519 774
. . not applicable
- nil or rounded to zero (including null cells)
(a) Source: Department of Finance, Consolidated Financial Statements for the Year Ended 30 June 2017, December 2017.

TABLE 2, STATEMENT OF STOCKS AND FLOWS, General Government Sector, State Government
			Opening stocks as at 1 July 2016	Transactions	Other Economic Flows	Closing stocks at 30 June 2017
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	15 654	4 778	-736	19 696
		Advances paid	9 194	22	90	9 306
		Investments, loans and placements	74 807	15 671	-7 376	83 102
		Other non-equity assets	24 968	285	1 936	27 189
		Equity	313 025	-22 427	41 628	332 226
		Total financial assets	437 648	-1 672	35 543	471 519
	Non-financial assets
		Land and fixed assets	647 129	15 414	8 215	670 758
		Other non-financial assets	4 087	1 270	142	5 499
		Total non-financial assets	651 216	16 683	8 358	676 257
Total assets			1 088 864	15 011	43 900	1 147 775
less
Liabilities
	Deposits held		3 393	-18	344	3 719
	Advances received		3 956	1 328	-110	5 174
	Borrowing		131 717	-1 177	2 044	132 584
	Unfunded superannuation and other employee entitlements		206 409	-19	-23 487	182 903
	Other provisions		11 917	-	882	12 799
	Other non-equity liabilities		23 162	5 020	-2 007	26 175
	Total liabilities		380 554	5 134	-22 335	363 353
equals
GFS Net worth			708 310	9 877	66 236	784 423
Net debt			39 412	. .	. .	29 373
Net financial worth			57 094	. .	. .	108 166
. . 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 2016	Transactions	Other Economic Flows	Closing stocks at 30 June 2017
			$m	$m	$m	$m
Assets
	Financial assets
		Cash and deposits	10 554	1 693	-316	11 931
		Advances paid	35	1	6	42
		Investments, loans and placements	13 133	1 841	238	15 212
		Other non-equity assets	3 949	-146	510	4 313
		Equity	7 167	-50	338	7 455
		Total financial assets	34 838	3 339	776	38 953
	Non-financial assets
		Land and fixed assets	406 348	5 665	13 971	425 984
		Other non-financial assets	1 656	143	-110	1 689
		Total non-financial assets	408 004	5 808	13 861	427 673
Total assets			442 841	9 146	14 639	466 626
less
Liabilities
	Deposits held		553	1	33	587
	Advances received		16	12	-13	15
	Borrowing		11 013	50	181	11 244
	Unfunded superannuation and other employee entitlements		3 398	60	-21	3 437
	Other provisions		127	83	-120	90
	Other non-equity liabilities		4 465	-676	829	4 618
	Total liabilities		19 572	-471	891	19 992
equals
GFS Net worth			423 269	9 618	13 747	446 634
Net debt			-12 139	. .	. .	-15 338
Net financial worth			15 266	. .	. .	18 961
. . not applicable
- nil or rounded to zero (including null cells)