Under current accounting standards, the Australian System of Government Finance Statistics Concepts, Sources and Methods, 2015 edition (also known as the AGFS15) will be effective for data reported for the period from 1 July 2017 onwards. This manual supersedes the Australian System of Government Finance Statistics Concepts, Sources and Methods, 2005, as amended in 2010.

The Australian GFS system is based on two important international statistical standards:

• the system of national accounts embodied in System of National Accounts 2008 (2008 SNA), issued jointly by the United Nations (UN), the International Monetary Fund (IMF), the Commission of European Communities, the Organisation for Economic Co-operation and Development (OECD) and the World Bank; and
• the International Monetary Fund Government Finance Statistics Manual 2014 (IMF GFSM 2014), which is the international statistical standard for compiling GFS developed by the IMF (in consultation with member countries). The current version was released in 2015, and it replaced the version released in 2001.

The 2008 SNA can be seen as an ‘umbrella’ standard with which a number of other international statistical standards are ‘harmonised’. The harmonised standards use 2008 SNA statistical concepts and, to a degree, use common classifications and items, enabling links between the harmonised system and the SNA to be readily established. The IMF standard for GFS is such a harmonised system.

The 2008 SNA is a statistical framework relating to the whole of an economy and covers government activities only as a component. The 2008 SNA also differs from the GFS system in that its central focus is on economic concepts such as production, whereas the GFS system concentrates mainly on fiscal concepts such as revenues and expenses.

The Australian System of National Accounts (ASNA) is aligned with international standards for national accounts set out in the 2008 SNA. There are close links between the ASNA and Australia’s GFS system, which is the main source of ASNA statistics about the general government sector and public non-financial corporations. The GFS system is designed to provide data that can be used in compiling the national accounts and the two data systems have many concepts in common.

The IMF GFS standard is internationally accepted as the appropriate framework on which to base the preparation and presentation of GFS. Therefore, the core definitions and descriptions in this manual are deliberately intended to be consistent (where possible) with equivalent descriptions and definitions in the IMF GFSM 2014. The ABS provides GFS to the IMF for publication with similar statistics for all IMF member countries. Because these statistics are prepared according to the IMF standard, they can be used to compare Australian government finance with the government finance of the other member countries. In publishing GFS for Australia, the ABS includes minor adaptations of the IMF standard, only deviating where necessary to meet local needs. Details of where the AGFS15 deviates from the IMF GFS standards are provided in Chapter 17 of this manual.

Harmonisation of the GFS system with the SNA ensures that users of GFS can relate the statistics to national accounts data for the whole economy and other sectors. International statistical standards relating to the Balance of Payments and International Investment Position Manual (BPM 6) and the Monetary and Financial Statistics Manual (MFSM) are also harmonised with the SNA. Therefore, where these statistics use concepts that are also used in the GFS system, the concepts are defined in the same way as in the GFS system.

Government activities covered by the GFS system include not only the functions of government departments and authorities that are financed primarily from taxation (classified as general government units and described as ‘non-market’ units in the IMF GFSM 2014), but also the operations of government controlled corporations and authorities (described as ‘market’ units in the IMF GFSM 2014). Distinctions are made in the statistics between the operations of such market-oriented units controlled by governments and all other government units. Market-oriented units are further sub-divided between those with primarily financial functions, such as government controlled banks and insurance companies (public financial corporations), and other market units such as government controlled utilities (referred to as public nonfinancial corporations). All three levels of government (national, state / territory, and local) are covered by the statistics and separate data are compiled for each level of government and for each jurisdiction (i.e. the Commonwealth, each state and territory and the control not further defined sector which includes public universities).

The main sources of information for compiling GFS in Australia are the data systems that support the public accounts of the Commonwealth, and each state and territory government. These accounts are largely geared towards financial accountability and control and are in a format reflecting accounting standards and legal and administrative imperatives in each jurisdiction. In compiling the statistics, the ABS makes use of the accounts of other government authorities that fall within the scope of the GFS system but are not covered by the public accounts and keep their own particular forms of financial accounts. Also used are local governments’ accounts, which are kept in a form dictated by administrative requirements and accounting standards.

The accounts that are the main sources of information for compiling GFS in Australia generally comply with Australian accounting standards for government entities. The accounting concepts established by these standards are generally consistent with the statistical concepts employed in GFS. In developing Australia’s GFS system, the ABS has worked closely with government accountants and the Australian Accounting Standards Board and has endeavoured to identify wand document the small number of unavoidable differences between the GFS system and the accounting standards.

Although accounting standards impose a high degree of uniformity on government financial reporting, government financial reports generally do not contain the degree of classificatory detail and the focus on particular economic and fiscal measures that GFS provides. Only the GFS system provides data that can be used for international comparisons and can be related to economic data included in the national accounts. The GFS relationship to the Australian accounting standards is further discussed in Chapter 17 of this manual.

In the past, government accounts were maintained primarily on a cash basis and only cash flows and selected balances were recorded. Similarly, the GFS system was originally a cash based system. However, the ABS moved to an accruals basis of recording GFS with supporting information about cash flows in 2000. Under the GFS accrual system, all economic events that create, transform, exchange, transfer or extinguish economic value are recorded, whether or not they are associated with cash flows. All such events are recorded at the time at which they occur rather than when associated cash flows occur.

In broad terms, the primary use of GFS is in fiscal analysis or the analysis of government financial data for the purpose of developing and evaluating government economic policy. Fiscal analysts focus on measures that are indicative of the financial situation of governments and the impact of government operations on the rest of the economy. While a wide range of financial information is required to meet the needs of fiscal analysts, a prominent feature of fiscal analysis is the use of key indicators that provide a convenient summary of financial outcomes. These indicators are derived using reported flows and / or stock positions. They are sometimes referred to as analytical balances or balancing items. Aggregates are generally calculated by summing individual flows / stocks, while balances are calculated by subtracting one aggregate from another aggregate.

This manual is intended as a general reference document for users and compilers of GFS. For users, the manual provides a detailed account of the concepts underlying GFS, the sources of data employed and the methods used to compile the statistics. As such, the manual should assist users to obtain a deeper understanding of the nature and content of the statistics than can be obtained from the ABS publications in which the statistics are presented. For compilers, the manual is intended to serve as a training aid and as a working reference on matters of technical detail.

This manual has been structured to provide a sequence of discussion of the concepts, sources and methods used in the compilation of GFS. The following structure has been used:

• Chapter 1: Introduction - (this chapter) discusses the nature of the GFS and the purpose and organisation of this manual.
• Chapter 2: Institutional units and sectors - discusses the scope and coverage of institutional units and sectors, including discussion on the concept of residence, types of institutional units, and the different institutional sectors.
• Chapter 3: Flows, stock positions and accounting rules - discusses economic flows in the context of transactions and other economic flows, the rearrangement of certain GFS transactions such as rerouting, partitioning, and reassignment, the economic stocks of assets, and the accounting rules used in the GFS.
• Chapter 4: The analytical framework - describes the ABS GFS analytical framework, discusses some of the input classifications and the statements that make up the GFS analytical framework.
• Chapter 5: The statement of operations - looks at the elements that relate to the GFS statement of operations, including the concepts of revenue and expenses, the net operating balance, transactions in non-financial assets, and the concept of GFS net lending (+) / net borrowing (-).
• Chapter 6: Revenue - examines the concept of revenue in detail, including revenue recognition, the time of recording of revenue and the detailed classification of revenue in the GFS.
• Chapter 7: Expenses - examines the concept of expenses in detail, including the time of recording of expenses, the treatment of certain expenses in GFS such as government payments to NPIs and superannuation, and the classification of expenses in the GFS.
• Chapter 8: The balance sheet - looks at the elements that make up the GFS balance sheet, describes the concepts of assets and liabilities, and discusses some other aspects of the GFS balance sheet including the treatment of debt in the GFS system.
• Chapter 9: Transactions in non-financial assets - examines the nature of non-financial assets, including the valuation, the time of recording and the classification of non-financial assets in the GFS system.
• Chapter 10: Transactions in financial assets and liabilities - examines the nature of financial assets and liabilities and the relationship between them, including the valuation, the time of recording and the classification of financial assets in the GFS system.
• Chapter 11: Other economic flows - discusses the concept of other economic flows in the context of holding gains and losses and other changes in the volume of assets and liabilities, and their classification in the GFS system.
• Chapter 12: The statement of sources and uses of cash - describes the definitions and classifications associated with the statement of sources and uses of cash in GFS.
• Chapter 13: Treatment of selected items - describes the treatment of various items that appear in the statement of operations and the balance sheet.
• Chapter 14: Data sources and methods of compilation - describes the data sources and the collection methodology used in the ABS GFS system, and the methods used in compilation of GFS data.
• Chapter 15: Data output - describes the statistical output of the GFS system.
• Chapter 16: Data quality - analyses the accuracy, reliability and timeliness of the statistics.
• Chapter 17: Relationships to other statistical systems - provides a broad description of the relationship of the AGFS15 with the IMF GFSM 2014, the ASNA, and the Australian accounting standard AASB 1049.
• Appendix 1: Classifications for compiling GFS
  • Part A: GFS classifications and framework - describes the GFS classifications and framework used in compiling GFS.
  • Part B: Supplementary information - describes the supporting information that appears as GFS input classifications, such as memorandum items, contingent liabilities, debt maturity, and a breakdown of own account capital formation.
  • Part C: Classification of the functions of government - Australia (COFOG-A) - describes the definitions and classifications contained in the COFOG-A.
• Appendix 2: Summary of changes from the Australian system of government finance statistics concepts, sources and methods, 2005 - describes the changes in the AGFS15 from the Australian System of Government Finance Statistics Concepts, Sources and Methods, 2005, as amended in 2010.
• Appendix 3: Departures from the international GFS standards - summarises the departures from the IMF GFSM 2014 in the AGFS15.

A glossary of terms used in the manual and index are provided at the end of this manual.