Part 3: Fiscal strategy and outlook
Attachment C
SUPPLEMENTARY EXPENSE TABLE AND THE CONTINGENCY RESERVE
Expenses
Table 3.20 shows estimates of Australian Government general government expenses
by function and sub-function for 2010-11 and the forward years.
56
General public services
Legislative and executive affairs
Financial and fiscal affairs
Foreign affairs and economic aid
General research
General services
Government superannuation
benefits
Defence
Public order and safety
Education
Health
Social security and welfare
Housing and community amenities
Recreation and culture
Fuel and energy
Agriculture, fisheries and forestry
Mining, manufacturing and
construction
Transport and communication
Other economic affairs
Tourism and area promotion
Labour and employment affairs
Immigration
Other economic affairs nec
1,079
7,053
5,544
2,881
724
3,913
21,086
3,924
32,977
57,435
115,699
5,830
3,312
7,214
3,685
2,041
5,080
152
4,740
1,762
2,273
3,485
21,000
3,878
32,996
56,880
114,961
5,432
3,246
7,607
3,587
1,990
4,932
152
5,003
1,762
2,232
MYEFO
$m
1,057
6,521
5,575
2,791
707
Budget
$m
2010-11
57
0
-5
0
2
3
3
12
0
1
0
1
1
7
2
-5
3
2
8
-1
3
2
Change
on
Budget
%
164
4,649
1,525
2,274
2,476
6,664
3,498
20,540
3,860
29,577
71,958
119,792
4,212
3,159
7,287
3,038
927
7,130
6,006
2,659
701
Budget
$m
Estimates
175
4,418
1,526
2,286
2,008
6,711
3,384
19,921
3,878
29,446
72,139
120,491
4,512
3,216
7,437
3,038
953
7,371
5,934
2,785
697
MYEFO
$m
2011-12
7
-5
0
1
-19
1
-3
-3
0
0
0
1
7
2
2
0
3
3
-1
5
-1
Change
on
Budget
%
167
4,615
1,506
2,261
2,513
8,247
3,537
21,323
3,944
30,275
75,761
125,187
4,173
3,139
7,072
2,624
913
7,293
6,696
2,606
694
Budget
$m
179
4,293
1,504
2,268
1,987
7,258
3,448
20,654
3,949
30,111
75,957
126,203
4,378
3,175
7,088
2,408
938
7,497
6,550
2,694
683
MYEFO
$m
2012-13
7
-7
0
0
-21
-12
-3
-3
0
-1
0
1
5
1
0
-8
3
3
-2
3
-2
Change
on
Budget
%
170
4,555
1,543
2,220
2,573
7,006
3,647
22,883
3,972
31,262
80,085
130,547
4,174
3,150
6,800
2,342
1,061
7,134
7,682
2,495
695
Budget
$m
Projections
Table 3.20: Estimates of Australian Government general government expenses by function and sub-function
182
4,316
1,537
2,222
1,953
6,206
3,579
22,064
3,975
30,976
80,332
131,063
4,246
3,208
6,796
2,094
1,089
7,329
7,479
2,536
689
MYEFO
$m
2013-14
7
-5
0
0
-24
-11
-2
-4
0
-1
0
0
2
2
0
-11
3
3
-3
2
-1
Change
on
Budget
%
Part 3: Fiscal strategy and outlook
354,348
50,000
577
-752
50,403
577
1,195
354,644
9,132
6,989
9,606
7,065
MYEFO
$m
0
-1
0
-163
-5
-1
Change
on
Budget
%
364,573
40,303
80
3,329
11,463
7,301
Budget
$m
Estimates
362,002
39,579
80
2,424
10,280
7,315
MYEFO
$m
2011-12
42,352
80
4,457
380,997
-1
12,010
7,552
Budget
$m
-2
0
-27
-10
0
Change
on
Budget
%
(a) Asset sale related expenses are treated as a component of the Contingency Reserve sub-function.
Total expenses
Other purposes
Public debt interest
Nominal superannuation interest
General purpose inter-government
transactions
Natural disaster relief
Contingency reserve(a)
Budget
$m
2010-11
Table 3.20: Australian Government expenses by function and sub-function (continued)
376,789
42,158
80
3,109
10,657
7,565
MYEFO
$m
2012-13
-1
0
0
-30
-11
0
Change
on
Budget
%
397,981
44,216
80
7,890
11,978
7,818
Budget
$m
Projections
392,512
44,140
80
5,857
10,734
7,832
MYEFO
$m
2013-14
-1
0
0
-26
-10
0
Change
on
Budget
%
Part 3: Fiscal strategy and outlook
58
Part 3: Fiscal strategy and outlook
Contingency Reserve
The Contingency Reserve (other purposes function) is an allowance, included in
aggregate expenses, principally to reflect anticipated events that cannot be assigned to
individual programs in the preparation of the Australian Government budget
estimates. The Reserve is used to ensure that the budget estimates are based on the
best information available at the time of the Mid-Year Economic and Fiscal Outlook
(MYEFO). It is not a general policy reserve.
The Reserve ensures that aggregate estimates are as close as possible to expected
outcomes, but it is not appropriated. Allowances that are included in the Reserve can
only be drawn upon once they have been appropriated by Parliament. These
allowances are removed from the Reserve and allocated to specific agencies for
appropriation and for outcome reporting closer to the time when the associated events
eventuate.
The Contingency Reserve contains an allowance for the tendency for estimates of
expenses for existing Government policy to be revised upwards in the forward years,
known as the conservative bias allowance. Since the 2010-11 Budget, the allowance has
been drawn down to ¼ of a per cent of total general government sector expenses
(excluding GST payments to the States) in the first year of the forward estimates
(2011-12), ¾ of a per cent of expenses in the second forward year (2012-13), and
1½ per cent of expenses in the third forward year (2013-14). This involves a reduction
in expenses of $771 million in 2011-12, $833 million in 2012-13 and $1.8 billion in
2013-14. The drawdown of the conservative bias allowance in the MYEFO is consistent
with long-standing practice and does not represent a saving or offset to Government
spending measures.
The Contingency Reserve also makes allowance in 2010-11 and the forward years for
anticipated events, including the following:
• a provision for underspends in the current financial year reflecting the tendency for
budgeted expenses for some agencies or functions not to be met;
• commercial-in-confidence and national security-in-confidence items that cannot be
disclosed separately and programs that are yet to be negotiated with State and
Territory governments;
• decisions made too late for inclusion against individual agency estimates;
• the effect on the budget and forward estimates of economic parameters revisions
received late in the process and hence not able to be allocated to individual agencies
or functions; and
• provisions for events that are reasonably expected to affect the budget estimates, for
example, a provision for the continuation of drought relief in 2010-11 and 2011-12.
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Part 3: Fiscal strategy and outlook
The Contingency Reserve includes a provision for future increases in Australia’s
official development assistance yet to be allocated to specific aid programs. However,
in Table 3.20 in this attachment, these expenses are allocated to the Foreign Affairs and
Economic Aid Support sub-function. This provision is currently set at $78 million in
2010-11, $227 million in 2011-12, $543 million in 2012-13 and $1.5 billion in 2013-14.
The Contingency Reserve also includes provisions for future equity investments in the
National Broadband Network (NBN). The exact timing and quantum of funding for
the NBN will be determined in the Government’s response to the Implementation
Study and following settlement of the Definitive Agreements between NBN Co and
Telstra.
A provision for remaining election commitments which will be progressed in the
2011-12 Budget (spending of $314 million in 2011-12 and savings of $211 million in
2012-13 and $244 million in 2013-14) has also been included in the Contingency
Reserve.
60