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

1. INTRODUCTION
EXPLANATORY NOTES
The law relating to the finances of the State of Victoria is contained in the Constitution Act
(1975), the Audit Act (1958) and the Public Account Act (1958).
The Constitution Act creates the Consolidated Revenue and makes its appropriation the
prerogative of Parliament. It also establishes the requirement that any money bill must be
preceded by a message from the Governor, and that expenditure may be incurred only on
warrants from the Governor.
The Audit Act relates to the financial administration of moneys coming into the hands of
the Government; the collection, management and expenditure of, and the subsequent accounting
for, these moneys, public property and other property. The Act provides for the audit of the
public accounts, including departmental accounts, and the reporting to Parliament by the Auditor-
General on the Finance Statement.
The Public Account Act defines the scope of the Consolidated Fund and the Trust Fund,
the balances of which are held in the Government's bank account — the Public Account. The
Trust Fund includes the Works and Services Account, the Cash Management Account and the
State Development Account. The Cash Management Account and the State Development Account
form the Victorian Development Fund. The Public Account Act also permits the use of the Public
Account for temporary advances for a number of purposes related to the needs of the
Government and provides for investment of the Public Account in trustee securities. Provision is
also made for temporary borrowings should the balance in the Consolidated Fund be insufficient
to meet commitments during a financial year.
A distinction is made between Recurrent transactions and Works and Services transactions
in appropriation legislation, and hence in the recording and reporting of the transactions in the
Consolidated Fund. This categorisation of Consolidated Fund receipts and payments has been
adopted by Victorian Governments over many years.
It should be noted that Recurrent and Works and Services transacfions as recorded in the
Consolidated Fund do not exactly correspond to current and capital outlays as they are
distinguished in the national accounting format which is the format in which budget data are
presented in the Budget Papers for analytical purposes. Works and Services appropriations as
defined in appropriation legislation may incorporate a wide range of transactions, although they
are mainly of a capital nature. Similarly, Recurrent appropriations embrace some payments
which are not classified as current outlays in the national accounting format. The Government
will review the appropriate classification of transactions.