Statement of Receipts and Payments of the Consolidated Fund and ...

SUPPLEMENTARY INFORMATION
The Treasurer has provided the following supplementary information:-
l^FPORTING OF DEBT AND LIABILITIES
In recent years the content of the Finance Statement has been progressively expanded to
disclose greater information on the State's debt and other categories of liabilities. Coupled with
the development of the State's Public Balance Sheet this has put Victoria in a leading position
compared with other States in the disclosure of aggregate liabilities, of which debt is a major
component.
This Finance Statement contains detailed information on :
(a) Public Sector net debt, separated into net debt of the Budget Sector and the Non-Budget
Sector;
(b) leasing commitments under both operating leases and finance leases (only the latter
being liabilities under current accounting standards);
(c)the unfunded liabilities of public sector superannuation schemes;
(d) creditors of administrative units;
(e) contingent liabilities; and
(f) other financial commitments.
The concept of liabilities used by the Victorian Government in its financial reporting is
consistent with the general approach used in Australian accounting standards. The definition of
net debt, as a part of total liabilities, was detailed in the publication Victorian Public Sector Debt,
Department of Management and Budget Information Paper No. 2 of 1986, and is based on
statistical concepts in measuring net debt adopted by the Australian Bureau of Statistics and
internationally. Victoria has considered it important to distinguish net debt from the concept of
liabilities as a whole. Debt is currently legally owing and generally requires servicing through an
annua! interest payment. The concept of liabilities is broader and includes payments which will
be required to be made at some future date, but for which no legal debtor/creditor relationship
yet exists, e.g. unfunded superannuation liabilities.
Contingent liabilities by definition are not actual liabilities. They may only become
liabilities, contingent on some future event. By definition they are not probable events;
obligations which are likely to arise from some future event (i.e. are probable) are included as
part of the broad concept of actual liabilities.
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