Government Finance Statistics, Australia methodology

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Reference period
September 2019

Explanatory notes


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 by the level of government, institutional sector or set of transactions. The system of GFS is based on international standards set out in the System of National Accounts, 2008 (2008 SNA) and the International Monetary Fund's (IMF) Government Finance Statistics Manual (GFSM).

4 The IMF published a revised Government Finance Statistics Manual (GFSM 2014) and the ABS GFS Manual was updated to reflect the new international standards. These changes are presented in the Australian System of Government Finance Statistics: Concepts, Sources and Methods (cat. no. 5514.0) (AGFS15) and have been implemented for data reported for periods from 1 July 2017 onwards.


5 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:

  • Total public sector
    • Non-financial public sector
      • General government
      • Public non-financial corporations
    • Public financial corporations

6 This quarterly GFS release presents statistics on revenues, expenses and net acquisition of non-financial assets for the general government sector and public non-financial corporations sector. Quarterly balance sheet outputs for the Commonwealth general government and total state general government sectors are also included as part of AGFS15 implementation.

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. Public 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 PNFC 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 state rail authorities, and local bus and transport operations.

GFS measures

13 The principal analytical GFS measures shown in this 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.
  • GFS net worth - is the total stock of assets less liabilities and shares / contributed capital. For the general government sector, net worth is assets less liabilities since shares / contributed capital is zero. This measure reflects the contribution of governments to the wealth of Australia.

Levels of government

14 The public sector comprises all organisations owned or controlled by any of the three levels of government within the Australian political system; national (which includes Commonwealth and multi-jurisdictional), state and local. In this release, statistics including all three levels are called 'All Levels of Government'. The multi-jurisdictional sector is not shown separately but has 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, 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 (ACT) 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 - 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 Detailed information on the concepts, sources and methods used in compiling GFS can be found in Australian System of Government Finance Statistics: Concepts, Sources and Methods (cat. no. 5514.0).

Sources and methods

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, the primary quarterly data sources are public accounts and budget management systems of state treasuries and the Commonwealth Department of Finance. For South Australia, quarterly GFS was collected from an ABS survey of the largest state government departments up to June quarter 2011. The survey has been replaced by data for all departments sourced from the South Australian budgetary management system. For the public non-financial corporation sector, GFS are 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 Quarterly GFS data is sourced from Commonwealth and state accounts that are not finalised and which are subject to revision. For this reason summing the four quarters of a financial year will not equal the final annual data published in Government Finance Statistics, Australia (cat. no. 5512.0).


26 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'.

27 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.

Interstate comparisons

28 The statistics in this publication 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.

29 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 ACT and a number of functions performed by it are undertaken by local government authorities in other jurisdictions.

Relationship of GFS to other information

Uniform presentation framework

30 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.

31 Since 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 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 implemented beginning with most jurisdictions' Budgets for 2000-01.

Accounting standards

32 From 2008-09 onwards, Australian Accounting Standard Board 1049 Whole of Government and General Government Sector Financial Reporting (AASB 1049) replaced Australian Accounting Standard 31 Financial Reporting by Government (AAS 31) as the standard Governments should follow in the preparation of their annual financial statements. Information on AASB 1049 is available from the Australian Accounting Standards Board website

33 A key feature of AASB 1049 is the requirement that where the GFS standards differ from the accounting standards, a reconciliation to the key GFS aggregates and an explanation must be presented. The key fiscal aggregates are the net operating balance, net borrowing / lending, cash surplus / deficit, and net worth. A functional statement of expenses should also be reported. AASB 1049 covers General Government and Whole of Government, but does not apply to individual government agencies. Whole of Government for each jurisdiction is referred to as Total public sector in GFS.

34 Data presented in this publication may differ from data published by Treasuries if:

  • Treasuries have not adjusted their data to a GFS basis;
  • ABS has a different view on classification treatments applied by jurisdictions;
  • ABS employs a different consolidation methodology to those used by jurisdictions;
  • ABS applies reconciliation adjustments when it consolidates data for all jurisdictions and compares annual data with quarterly data used in compiling the national accounts; and
  • ABS includes data which were not available when a jurisdiction's GFS presentations were published (e.g. major asset sales).

Australian system of national accounts (ASNA)

35 While GFS and ASNA share the same conceptual framework (SNA), there are methodological differences between GFS and ASNA analytical measures (for example net worth and net lending/borrowing). 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).

36 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:

Government final consumption expenditure

         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

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

38 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.

39 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.

40 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.

41 Taxation revenue - In GFS, some 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. In the national accounts, on the other hand, all tax revenue is recorded when the taxpayer performs the underlying economic activity that gives rise to a tax liability.

42 Seasonal adjustment - Seasonal adjustment can be used to remove the effects of seasonal 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.


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


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