Tassie's balance sheet Part 3

 

The State’s net debt?

What is it?

Apart from being a measure  thrown into Government media releases whenever convenient?

Premier Giddings was at it again the other day reassuring us that the $15 million to be spent at Blundstone Arena (nee Bellerive Oval) would be responsible adding it “is not until the 2014-15 year after we've come out of net debt”.

Let’s have a look again at the latest Treasurer’s Annual Report for 2011/12.

Tassie's balance sheet Part 2

 

We are often assured that the State Government itself is net debt free.

Is this of any comfort when Governments enterprises are loaded with debt?

Any discussion about net debt or the broader measure of net financial liabilities is pointless without looking at both the Government itself and all its subsidiaries.

Tassie's balance sheet Part 1

 

On matters of financial management of the State’s finances almost all attention focuses on the Budget circus now programmed for May each year.

The political and media cycle ignores the Treasurer’s Annual Financial Report (TAFR) tabled in October each year. Whereas the Budget contains Estimated Outcomes for the almost completed year, the TAFR contains the actuals for both the General Government (GG) and the Total State Sector (TSS) which includes the GG plus all wholly owned subsidiaries – the Government Business Enterprises (GBEs) and State Owned Corporations (SOCs).

The TAFR is the equivalent of a listed company’s Annual Report which at least is scrutinised by shareholders at an AGM. No such attention is given to the TAFR which is a pity because it a comprehensive outline of the State’s situation based on actuals, free of the hype and nonsense that accompanies Budget papers.

Whilst spasmodic attention is given to GBEs and SOCs, there is a noticeable lack of understanding of the financial role these entities play as part of the TSS and their life saving contribution to their parent company, the GG.

The aim of this and the next few posts is to have a closer look at the Balance Sheets for both GG and TSS....... the statement of assets and liabilities for both......  and try to explain the important bits........ cash, loans, net debt and net financial liabilities and the fiscal strategy measures that relate to the balance sheet.

After all accounting is just a series of plusses and minuses.