Glossary of Terms

Above the Line/Below the Line Transactions The 'line' is the Budget balance (i.e. surplus or deficit). 'Me levels of revenue and outlays determine the level of the Budget balance and are therefore referred to as 'above the line' transactions. Financing transactions involve the investment of Budget surpluses or the financing of Budget deficits and are therefore referred to as 'below the line' transactions.

Act of Grace Payments: Section 34A of the Audit Act 1901 provides that, in special circumstances, the Commonwealth may pay an amount to a person notwithstanding that the Commonwealth is not under any legal liability to do so.

Administrative Expenses: Includes not just expenditure on office-based activities but all operational expenditure (excepting salaries). 'The item includes both direct costs and overhead expenditure: it includes, inter alia, minor capital expenditure (i.e. items less than $250,000) which is considered part of ordinary annual services; it does not include, inter alia, major capital expenditure, grants, loans or subsidies.

Advance to the Minister for Finance (AMIF): The contingency provisions appropriated in the two Supply Acts and the two annual Appropriation Acts to enable funding of urgent expenditures not foreseen at the time of preparation of the relevant Bills. These funds may also be used in the case of changes in expenditure priorities to enable 'transfers' of moneys from the purpose for which they were originally appropriated to another purpose pending specific appropriation.

Annual Appropriations: Acts which appropriate moneys for expenditure in relation to the Government's activities during the financial year. Such appropriations lapse on 30 June. They are the Appropriation Acts.

Appropriation: Authorisation by Parliament to expend public moneys from the Consolidated Revenue Fund or Loan Fund for a particular purpose, or the amounts so authorised. All expenditure (i.e. outflows of moneys) from the Commonwealth Public Account must be appropriated (i.e. authorised by the Parliament). The authority for expenditure from individual trust accounts is provided under the Audit Act 1901 or 'Annual Appropriations' and 'Special Appropriations'.

Appropriation Act (No l): An Act to appropriate moneys from the Consolidated Revenue Fund for the ordinary annual services of Government.

Appropriation Act (No 2): An Act to appropriate moneys from the Consolidated Revenue Fund for other than ordinary annual services. Under existing arrangements between the two Houses of Parliament, the Act includes appropriations in respect of new policies (apart from those funded under Special Appropriations), capital works and services, plant and equipment and payments to the States and the Northern Territory.

Appropriation Acts (No's 3, 4 and 5): Where an amount provided in an Appropriation Act (No 1 or 2) is insufficient to meet approved obligations falling due in a financial year, additional appropriation may be provided in a further Appropriation Act. Appropriations may also be provided in these Acts for new expenditure proposals.

Appropriation (Parliamentary Departments) Acts No's 1 and 2: Acts to appropriate moneys from the Consolidated Revenue Fund for the Parliamentary Departments.

Audit Act 1901: The principal legislation governing the collection, payment and reporting of public moneys, the audit of the Public Accounts and the protection and recovery of public property. Finance Regulations and Directions are made pursuant to the Act.

Below the Line Transaction See 'Above the line' transactions.

Commonwealth Public Account (CPA): The main bank account of the Commonwealth, maintained at the Reserve Bank in which are held the moneys of the Consolidated Revenue Fund, Loan Fund and Trust Fund (other dm the National Debt Sinking Fund).

Consolidated Revenue Fund (CRF), Loan Fund, Trust Fund: The three Funds comprise the Commonwealth Public Account (CPA).

CRF - The principal working fund of the Commonwealth mainly financed by taxation, fees and other current receipts. The Constitution requires an appropriation of moneys by the Parliament before any expenditure can be made from the CRF. Thew follows two forms:

  1. annual appropriations consisting of Supply Acts (No's 1 and 2), the Supply (Parliamentary Departments) Act, the Appropriation Acts (No's 1 to 5) and the Appropriation (Parliamentary Departments) Acts (No's 1 and 2) (the Supply Acts relate to the first five months of the financial year and are subsumed by the corresponding Appropriation Acts); and
  2. Special or standing appropriations.

Loan Fund – Authority for its establishment conies from the Audit Act 1901. All moneys raised by loan on the public credit of the Commonwealth are credited to the Loan Fund. Expenditures from the Loan Fund require an appropriation by Parliament and are limited to the purpose(s) for which moneys were originally raised as specified.

Trust Fund - Essentially comprises trustee funds (termed 'Heads of Trust') established under s.60 of the Audit Act (i.e. working accounts covering certain government agencies and certain other accounts in the nature of suspense accounts'); and trust accounts established under other Acts to meet future expenditure.

Payments into the trust Fund may be by way of appropriation from the CRF or Loan Fund or direct credit of private moneys. Expenditure from the Trust Fund is appropriated for (and limited to) the specific purposes of each trust account, or head of trust, by the Audit Act or the Act establishing the trust account or head of trust. Unlike the unused portion of annual appropriations, trust account balances - as with 'special' or 'standing' appropriations - do not lapse at the end of the financial year.

Expenditure: The total or gross amount of money spent by the Government on any or all of its activities (ie the total outflow of moneys from the Commonwealth Public Account including both 'above the line' and 'below the line' transactions, c. f. 'Outlays'). All expenditure must be appropriated, ie authorised by the Parliament, (see also 'Appropriations'). Every expenditure item is classified to one of the economic concepts of outlays, revenue (ie offset within revenue) or financing transactions.

Expenditures from Appropriations classified as Financing Transactions: Refers to expenditures which are classified as financing transactions rather than outlays because they are considered to be closely or functionally related to the repayment of loans or comprise transactions involving financial assets or liabilities. They are also referred to as 'below the line' transactions. They mainly comprise repayments of principal on loans (the interest repayments on loans are 'above the line' and are. classified as outlays). See also 'Financing Transactions'.

Expenditures from Appropriations classified as Revenue:Refers to expenditures which are netted against receipts. They do not form part of outlays because they are considered to be closely or functionally related to certain revenue items or relate to refunds of receipts and are therefore shown as offsets to receipts e.g. refunds of PAYE tax installments, working capital advance to the Government Printer.

Financing Transactions: Relate to the raising and repayment of loan principal or transactions involving financial assets or liabilities (e.g. changes in investments or holdings of cash). They represent the difference between outlays and revenue and hence involve the investment of Budget surpluses or the financing of Budget deficits. As such they are referred to as 'below the line' transactions. See also 'Expenditure from Appropriations classified as Financing Transactions'.

Forward Obligations: Obligations existing at 30 June which create or are intended to create a legal liability on the Commonwealth to provide funds in future years and which have not been exempted from the forward obligations system. In special circumstances, arrangements which do not create a legal liability, but which require forward obligations cover for effective program management, may also be included in the forward obligations system e.g. memoranda of understanding with other Governments and foreign aid arrangements. The following items are exempted from the forward obligations system:

  • all items classified in Appropriation Acts as Running Costs (i.e. salaries, administrative expenses);
  • Those times for which payment is authorised by special legislation where the amount and timing of payments are specified or clearly dictated by eligibility criteria (i.e. most, but not all, Special Appropriations); and
  • those items which have been exempted by the Minister for Finance. as a result of specific case-by-case requests from departments.

Loan Fund: See 'Consolidated Revenue Fund'.

Ordinary Annual Services: See 'Appropriation Act (No 1)' and 'Appropriation Act (No.2)'.

Outlays: An economic concept which shows the net extent to which resources are directed through the Budget to other sectors of the economy after offsetting recoveries and repayments against relevant expenditure items (i.e. outlays consist of expenditure net of associated receipt items). See also 'Appropriations'; and 'Receipts offset within outlays'.

Receipts: The total or gross amount of moneys received by the Commonwealth (i.e. the total inflow of moneys to the Commonwealth Public Account including both 'above the line' and 'below the line' transactions). Every receipt item is classified to one of the economic concepts of revenue, outlays (i.e. offset within outlays or financing transactions). See also 'Revenue'.

Receipts Not Offset Within Outlays: Receipts classified as 'Revenue'. See also 'Revenue'.

Revenue: Items classified as revenue are receipts which have not been offset within outlays or classified as financing transactions. The term 'revenue' is an economic concept which comprises the net amounts received flow taxation, interest, regulatory fees, investment holdings and government business undertakings. It excludes amounts received from the sale of government services or assets these are offset within outlays and amounts received from loan raising (these are classified as financing transactions). Some expenditure is offset within revenue e.g. refunds of PAYE tax installments and the operating expenditure of budget sector business undertakings. See also 'Receipts'.

Special (Standing) Appropriation Moneys appropriated by a specific Act of Parliament for a specific purpose (e.g. unemployment benefits, grants to states for schools). They may or may not be for a specific amount of moneys or particular period of time. Special Appropriations do not require annual spending authorisation by the Parliament as they do not lapse at the end of each financial year. A distinction is sometimes made between Standing and Special appropriations (although for the purposes of these financial statements both are comprehended by the term 'Special Appropriation'). Standing appropriations refer to an open-ended appropriation of the Consolidated Revenue Fund by the enabling Act of a legislatively-based program: the amount appropriated will depend on the demand for payments by claimants satisfying program eligibility criteria specified in the legislation. Special Appropriations can be regarded as somewhere between Standing and Annual Appropriations: while a specified amount is provided, it is included in a separate Bill authorising the particular program and can be specified for any number of years.

Trust Account Transactions Affecting Outlays: Refers to the movement in trust account balances. Outlays measure the net extent to which resources are directed from the Commonwealth Public Account (i.e. through the Budget) to other sectors of the economy. Accordingly, the transactions of the CRF, the Trust Fund and the Loan Fund are consolidated and inter-fund transfers disregarded. Thus expenditure from the CRF under an appropriation to a trust account would not in itself contribute to outlays, but the expenditure, undertaken from the trust account would. Consequently, in reconciling the level of outlays to the level of expenditure, it is necessary to adjust the latter for the movements in trust account balances which are classified as outlays.

Trust Fund: See 'Consolidated Revenue Fund'.