Government Finance Statistics, Annual

The GFS net operating balance for all levels of government in 2017-18 was $9,839m for the general government sector and -$2,907m for the total public sector.

GFS net lending/borrowing for all levels of government in 2017-18 was -$20,242m for the general government sector and -$42,218m for the total public sector.

The cash operating result for all levels of government in 2017-18 was a deficit of -$18,309m for the general government sector and a deficit of -$31,198m for the total public sector.

GFS net worth reflects the contribution of governments to the wealth of Australia. The consolidated net worth as at 30 June 2018 for all levels of government was $915,224m.

Australia's system for producing GFS has been updated as a result of revised international standards for compiling national accounts (2008 SNA) and the consequent revision of the International Monetary Fund's GFS Manual 2014 (IMF GFSM 2014). An updated ABS GFS Manual was released on 23 December 2015 to reflect the AGFS15 changes and can be found in Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2015 (cat. no. 5514.0). AGFS15 is effective for all GFS data that is reported for all periods from 1 July 2017 onwards.

A range of conceptual changes under AGFS15 are outlined in the updated ABS GFS Manual. Details of the changes that impact annual GFS data are covered in a recent Information Paper: Forthcoming Changes to the Annual Publication for Government Finance Statistics (cat. no. 5512.0.55.001).

In December 2015, the Commonwealth Government released the 2015-16 Mid-Year Economic and Fiscal Outlook (MYEFO) which included a reclassification of visa application charges (VAC). In MYEFO these charges are now treated as taxation revenue rather than sales of goods and services. This reclassification has been applied to GFS, with no impact on total GFS revenue or the GFS net operating balance. The National Accounts statistics will maintain coherence with previously published data and classify this transaction as sales of goods and services. These treatments will remain in place until a review of the treatment of VAC across macroeconomic statistics has been completed.

The ABS has reviewed the confidentialisation of historical GFS data following the release of the updated Census and Statistics Determination 2018. This Determination is a key legislative instrument that sets out the circumstances under which the ABS may release statistical information collected under the Census and Statistics Act 1905. This review has resulted in the release of previously confidentialised GFS data which will enable additional analysis across the historical time series. This is on the basis that data providers have not objected or demonstrated that the release of this data would identify them.

For the total public sector across all levels of government, GFS revenue increased by $48,586m (7.2%) from $671,539m in 2016-17 to $720,125m in 2017-18. Over the same period GFS expenses increased by $27,278m (3.9%) from $695,753m to $723,031m. As a result the GFS net operating balance moved from -$24,213m in 2016-17 to -$2,907m in 2017-18.

Between 30 June 2017 and 30 June 2018 GFS net worth across the total public sector for all levels of government moved from $884,301m to $915,224m.

The following tables show a time series of major aggregates for the total public sector across different levels of government.

For the Commonwealth Government total public sector, GFS revenue increased by $42,160m (9.8%) from $428,467m in 2016-17 to $470,627m in 2017-18. Over the same period GFS expenses increased by $15,320m (3.3%) from $464,917m to $480,237m. As a result the GFS net operating balance moved from -$36,450m in 2016-17 to -$9,609m in 2017-18.

Between 30 June 2017 and 30 June 2018 the GFS net worth for the Commonwealth Government total public sector moved from -$398,845m to -$429,700m.

The GFS net operating balance for state government total public sector moved from $4,886m in 2016-17 to -$571m in 2017-18.

Between 30 June 2017 and 30 June 2018 the GFS net worth for the state government total public sector moved from $784,023m to $822,535m.

GFS revenue for the general government sector across all levels of government increased by $47,371m (7.8%) from $609,585m in 2016-17 to $656,956m in 2017-18. Over the same period GFS expenses increased by $23,894m (3.8%) from $623,222m to $647,116m. As a result the GFS net operating balance moved from -$13,638m to $9,839m.

Between 30 June 2017 and 30 June 2018 GFS net worth for all levels of government moved from $884,302m to $915,224m.

The following tables show a time series of major aggregates for the general government sector across different levels of government.

For the Commonwealth Government general government sector, GFS revenue increased by $39,275m (9.3%) from $420,093m in 2016-17 to $459,368m in 2017-18. Over the same period GFS expenses increased by $13,763m (3.1%) from $450,102m to $463,865m. As a result the GFS net operating balance moved from -$30,009m in 2016-17 to -$4,497m in 2017-18.

Between 30 June 2017 and 30 June 2018 GFS net worth for Commonwealth Government general government sector moved from -$398,845m to -$429,700m.

The total all states GFS net operating balance for state government general government sector moved from $9,803m in 2016-17 to $7,656m in 2017-18.

Between 30 June 2017 and 30 June 2018 GFS net worth for state government general government sector moved from $784,024m to $822,535m.

Total general government expenses for all levels of government were $647,116m in 2017-18. The major contributors were expenditure on Social protection (27.5%), Health (20.0%), Education (15.4%) and General public services (11.4%).

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. Other economic flows can be disaggregated into movements in asset/liability values resulting from price changes ('revaluations') and those resulting from volume changes ('other changes in volume').

For more information on the statement of stocks and flows, refer to Chapter 4 in Australian System of Government Finance Statistics: Concepts, Sources and Methods, 2015 (cat. no. 5514.0) and Chapter 3 of the IMF's Government Finance Statistics Manual 2014 (GFSM 2014).

The statement of stocks and flows for the Commonwealth general government sector is presented in Table 1. During 2017-18 the net worth of the Commonwealth general government sector decreased by $30,855m. This was the result of other economic flows of -$26,358m and a GFS net operating balance (which reflects the change in net worth due to transactions) of -$4,497m.

During 2017-18 the net worth of the state general government sector increased by $38,511m, driven by $30,855m from other economic flows and a GFS net operating balance of $7,656m.

The net worth of the local general government sector increased by $19,580m in 2017-18. Other economic flows contributed $9,778m to this movement.

Public sector debt is defined as the level of debt liabilities owed by a government to its creditors. Public sector debt statistics can be used as a performance measure on the level of solvency and the liquidity of the public sector. They can also be used to assess the budget sustainability of governments.

The International Monetary Fund (IMF) released a staff discussion note titled What Lies Beneath: The Statistical Definition of Public Sector Debt in 2012. This note introduced the debt matrix - a grid presentation of public sector debt on both a gross and net basis, which enables the recording of debt based on type of debt instrument and level of government subsector.

With the implementation of AGFS15, the ABS has introduced the debt matrix presentation for public sector debt statistics, modified for the Australian situation. The ABS has broadened the financial assets and liabilities reported in the matrix beyond just debt instruments to also include other liabilities, namely equity.

The ABS has recognised that using a matrix-style presentation enables analysts and policy makers to analyse different measures of debt and other liabilities depending on their specific focus or interest. For example, if one is analysing a government’s liquidity, then the focus would be at the L1 to L3 level. However, if one is analysing a government’s longer term budget sustainability, then the focus would be at the L4 to L6 level.

Gross public sector debt consists of all liabilities that are debt instruments. It is described as the stock position in financial claims that require payment(s) of interest and / or principal by the debtor to the creditor at a date (or dates) in the future. The matrix presented below also includes non-debt liabilities.

Headline gross public sector debt (L5 under AGFS15) for the All Australia general government sector was driven by debt securities ($585,459m) and insurance and superannuation liabilities ($321,765m) of the national sector, as well as insurance and superannuation liabilities ($147,401m) and loans ($121,883m) of the state sector.

Net public sector debt is described as gross debt minus the stock position in financial assets corresponding to debt instruments. The matrix presented below also includes non-debt liabilities and their corresponding financial assets.

Headline net public sector debt (L5 under AGFS15) for the All Australia general government sector was driven by a net debt position for debt securities ($463,859m) and insurance and superannuation ($321,765m) of the national sector, as well as insurance and superannuation ($147,376m) and loans ($106,567m) of the state sector. This was partially offset by a net asset position for debt securities of the state sector (-$50,352m) and loans of the national sector (-$49,386m), as well as currency and deposits held by all levels of government (-$32,170m).

Headline net public sector debt (L5 under AGFS15) of the All Australia general government sector as a percentage of GDP was 52.6% at 30 June 2018, driven by the national sector (40.3%).

The statement of total changes in net worth combines the key results of the operating statement and the statement of stocks and flows in one statement.

This statement provides a clear statistical explanation of the factors causing the change in the net worth of government. It explains the sources of changes in assets and liabilities from one reporting period to another in terms of transactions in revenue and expenses as well as other economic flows. For example, a strong contribution to the change in net worth from other economic flows will highlight the influence of revaluations to assets and liabilities, which do not reflect fiscal decisions of government.

The decrease in the net worth of the Commonwealth general government sector during 2017-18 was driven by a negative net operating balance position (-$4,497m) and an increase in liabilities via other economic flows ($36,998m), primarily due to an upward revaluation of provisions for superannuation ($33,993m).

The increase in the net worth of the total state general government sector during 2017-18 was driven by a positive net operating balance position ($7,656m) and an increase in asset values via other economic flows ($38,198m), primarily due to upward revaluations of equity assets ($17,186m) and land ($13,034m). The total local general government sector saw a similarly positive net operating balance position ($9,802m) and large upward revaluations of non-financial assets ($10,107m).

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070, email client.services@abs.gov.au or email public.finance@abs.gov.au. The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.

This release previously used catalogue number 5512.0.