Part 3: Fiscal strategy and outlook
Attachment C
SUPPLEMENTARY EXPENSES TABLE AND THE CONTINGENCY RESERVE
Expenses
Table 3.21 shows estimates of Australian Government general government expenses
by function and sub-function for 2011-12 and the forward years.
59
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
977
7,686
5,762
2,873
823
3,728
21,050
4,012
30,016
60,944
124,857
5,871
3,375
7,021
3,569
2,144
8,324
175
4,817
2,264
2,347
974
7,421
5,776
2,872
811
3,034
21,277
3,969
29,938
59,858
121,907
4,579
3,397
6,302
3,444
2,014
6,919
177
4,552
2,332
2,324
Budget
$m
60
-1
6
-3
1
20
6
23
-1
1
0
2
2
28
-1
11
4
0
4
0
0
1
179
4,335
1,949
2,201
7,119
2,006
2,997
20,711
3,953
30,314
61,584
127,711
4,699
3,449
6,496
2,526
948
7,566
6,412
2,780
789
Budget
$m
Estimates
Change
on
MYEFO Budget
$m
%
2011-12
176
4,533
2,017
2,250
5,939
2,073
2,950
20,594
3,972
30,271
60,873
129,989
7,231
3,446
6,536
2,598
950
7,882
6,452
2,788
796
-2
5
3
2
-17
3
-2
-1
0
0
-1
2
54
0
1
3
0
4
1
0
1
Change
on
MYEFO Budget
$m
%
2012-13
182
4,246
1,653
2,137
6,748
1,965
3,033
21,895
3,961
31,414
64,711
133,322
4,579
3,331
6,594
2,245
1,091
7,416
7,325
2,684
800
Budget
$m
178
4,443
1,960
2,219
6,756
2,092
2,996
21,847
3,972
31,243
63,952
135,221
8,883
3,265
8,019
2,401
1,094
7,701
7,369
2,694
805
-2
5
19
4
0
6
-1
0
0
-1
-1
1
94
-2
22
7
0
4
1
0
1
175
4,198
1,658
2,121
6,267
1,974
2,992
22,771
4,026
32,720
67,734
139,194
4,141
3,250
6,622
2,385
949
7,550
8,232
2,582
823
Budget
$m
Projections
Change
on
MYEFO Budget
$m
%
2013-14
173
4,392
1,989
2,232
6,160
2,178
2,941
22,584
3,982
32,660
67,213
141,552
9,114
3,202
8,057
2,502
953
7,812
8,332
2,589
830
-1
5
20
5
-2
10
-2
-1
-1
0
-1
2
120
-1
22
5
0
3
1
0
1
Change
on
MYEFO Budget
$m
%
2014-15
Table 3.21: Estimates of Australian Government general government sector expenses by function and sub-function
Part 3: Fiscal strategy and outlook
Total expenses
Other purposes
Public debt interest
Nominal superannuation interest
General purpose inter-government
transactions
Natural disaster relief
Contingency reserve
371,747
50,479
512
-853
51,152
479
1,103
365,817
11,623
7,351
11,632
7,575
Budget
$m
2
-1
7
-177
0
-3
380,523
55,133
1,650
2,576
12,615
7,826
Budget
$m
Estimates
Change
on
MYEFO Budget
$m
%
2011-12
379,935
54,506
88
824
12,318
7,886
0
-1
-95
-68
-2
1
Change
on
MYEFO Budget
$m
%
2012-13
398,974
58,179
3,955
4,571
12,854
8,083
Budget
$m
400,623
57,544
90
3,287
12,453
8,141
0
-1
-98
-28
-3
1
414,137
60,942
1,416
8,472
12,602
8,338
Budget
$m
Projections
Change
on
MYEFO Budget
$m
%
2013-14
418,863
60,266
36
6,461
12,257
8,398
1
-1
-97
-24
-3
1
Change
on
MYEFO Budget
$m
%
2014-15
Table 3.21: Estimates of Australian Government general government sector expenses by function and sub-function
(continued)
Part 3: Fiscal strategy and outlook
61
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 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.
While the Reserve is designed to ensure that aggregate estimates are as close as
possible to expected outcomes, 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 2011-12 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 forward year (2012-13), ¾ of a
per cent of expenses in the second forward year (2013-14), and 1 ½ per cent of expenses
in the third forward year (2014-15). The drawdown of the allowance reduced expenses
by $813 million in 2012-13, $800 million in 2013-14 and $1.6 billion in 2014-15. The
drawdown of the conservative bias allowance during the MYEFO estimates update 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 2011-12 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 parameter revisions
received late in the process and hence are not able to be allocated to individual
agencies or functions; and
• provisions for events and pressures that are reasonably expected to affect the
budget estimates — for example, a provision for the continuation of drought relief
in 2011-12 and 2012-13.
62
Part 3: Fiscal strategy and outlook
The Contingency Reserve includes a provision for the costs associated with Australia
hosting the G-20 in 2014.
The Contingency Reserve also makes provision for future increases in Australia’s
Official Development Assistance yet to be allocated to specific aid programs. However,
in Table 3.21 in this attachment, these expenses are allocated to the Foreign Affairs and
Economic Aid Support sub-function. The provision is currently set at $254 million in
2012-13, $768 million in 2013-14, and $1.4 billion in 2014-15. The provision is increased
or decreased in line with the forecasts for the national accounts and when new aid
proposals are funded.
63