KK12 - The underlying Cash Balance

Question 1

Headline Cash Outcome

Answer 1

-Is the income of the government in a certain period of time, minus all the expenditure of the government in that period (makes budget look more positive as it has more receipts)

Question 2

Underlying Cash Outcome

Answer 2

-The total cash received by the federal government from all sources, minus the total cash paid, and removes and one-off figures like net cash flows and earnings from the future fund

Question 3

Net Cash Flows

Answer 3

The sales minus purchase of government assets (like privatisation of Medibank Private)

Question 4

Future Fund

Answer 4

-An investment fund run by the government to benefit future generations
-Its earnings are excluded as they do not help Australians in the period which they are earned

Question 5

Budget Outcome as A Percentage of GDP

Answer 5

Compares size of budget outcome against overall size of the economy, provides a better understanding of impacts on level of AD