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Part B - The analytical objectives of the GFS framework

Australian System of Government Finance Statistics: Concepts, Sources and Methods
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Paragraph 4.4 of the IMF GFSM 2014 describes the GFS analytical framework as a quantitative tool that supports fiscal analysis. The purpose of the GFS framework is to facilitate the identification, measurement, monitoring, and assessment of the impact of a government’s economic policies, and other activities within the economy.


To achieve these objectives, the GFS analytical framework follows the SNA format to enable integrated recording of government economic flows and stocks. The GFS framework requires that the opening values of economic stocks, plus the value of the transactions and other economic flows during the accounting period, should equal the values of the stocks at the end of the accounting period for individual classes of assets and liabilities.


In order to provide statistics for each component of the public sector, the GFS framework provides for the identification of the level of government, jurisdiction and institutional sector of each statistical unit in the framework. The GFS framework includes rules that govern the aggregation of data for individual units into totals for each level of government, jurisdiction and sector. The rules provide for the consolidation of flows and stocks that occur between units in the same level of government, jurisdiction or sector.


As well as providing the foregoing classification of units by level of government, jurisdiction and sector, the framework provides for the classification of economic flows by type (e.g. transactions versus other economic flows) and function (e.g. general public services, public order and safety, etc.) and economic stocks by type. At the broadest level, flows are subdivided between transactions and other economic flows. Transactions are categorised by type as either revenues, expenses, net acquisition of non-financial assets, net acquisition of financial assets, net incurrence of liabilities or net contributions of capital. Stocks are subdivided by type between non-financial assets, financial assets, liabilities, and shares and other contributed capital. Each of the classifications is hierarchical, such that each of the broad categories is disaggregated into subcategories, which in turn are further broken down into classes. The degree of disaggregation varies from category to category and is designed to cater for all analytical requirements.


The GFS framework presents information about opening stocks, flows during the accounting period and closing stocks, which enables the derivation of key analytical aggregates to support fiscal analysis. The key analytical aggregates that are derived from component statements are:

  • GFS Net Operating Balance - this is the difference between GFS revenues and GFS expenses. It reflects the sustainability of government operations and is also known as the change in net worth due to transactions.
  • GFS Net Lending (+) / Borrowing (-) - this shows the financing requirements of government, indicating the extent to which government is either putting financial resources at the disposal of other sectors in the economy or abroad, or utilising the financial resources generated by other sectors in the economy or from abroad. It is calculated as the GFS Net Operating Balance less the net acquisition of non-financial assets. A positive result reflects a net lending position and a negative result reflects a net borrowing position. This is also known as the change in net financial worth due to transactions.
  • GFS Net Worth - this is the total stock of assets minus liabilities and shares / contributed capital. For the general government sector, net worth is assets less liabilities since shares and contributed capital is zero. It is an economic measure of wealth and reflects the contribution of governments to the wealth of Australia.
  • GFS Net Financial Worth - this is the total stock of financial assets minus liabilities and shares/contributed capital. For the general government sector, net financial worth is financial assets less liabilities since shares and contributed capital is zero. It is an economic measure of the stock position of financial assets owned by the government of Australia.
  • Cash Surplus (+) / Deficit (-) - this is the net cash inflow from operating activities minus net cash outflow from investments in non-financial assets. The cash surplus/deficit is a measure of a sector's cash flow requirements and if positive (i.e. a surplus), it reflects cash available to governments to either increase financial assets or decrease liabilities. When this measure is negative (i.e. a deficit), it identifies the extent to which a government needs to run down its financial assets in order to finance the cash shortfall.


The GFS framework provides a structure within which very detailed presentations of GFS can be formulated. In theory, the items in each of the basic statements can be disaggregated to the finest levels of each of the stocks and flows classifications and cross-classified according to the level of government, jurisdiction and sector of each unit in the framework. In practice, there are practical and quality limits to the degree of detail that can be tabulated. However, the previously discussed objectives of the framework are readily achieved with this design.