Part 3: Fiscal Outlook

Attachment E

Supplementary expense tables and the Contingency Reserve

Expenses

Table 20 shows estimates of Australian Government general government sector expenses by function and sub-function for 2003-04 and the forward years.

Table 20: Estimates of Australian Government general government sector expenses by function

Table 20: Estimates of Australian Government general government sector expenses by function (continued)

This table reflects the corrigendum numbers issued on 27 May 2003 due to a misclassification between expense functions in the 2003-04 Budget. The misclassification affected the Financial and fiscal affairs, Health, Social security and welfare and Fuel and energy functions in this table, but did not affect the aggregate budget figures.

Contingency Reserve

The Contingency Reserve is an allowance, included in aggregate expenses figuring, to reflect anticipated events that cannot be assigned to individual programmes in the preparation of the Australian Government budget estimates. The reserve is an estimating device used to ensure that the budget estimates are based on the best information available at the time of the MYEFO. It is not a general policy reserve.

While the reserve ensures 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.

The Contingency Reserve makes allowance in 2003-04 and the forward years for anticipated events, including the following:

an allowance for the tendency for estimates of expenses for existing government policy to be revised upwards in the forward years;
an allowance for the tendency for the estimates of administered expenses for some specific agencies or functions to be overstated in the budget year;
commercial-in-confidence and national security-in-confidence items that cannot be disclosed separately;
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 not able to be allocated to individual agencies or functions; and
provision for lapsing programmes and other pressures for funding where the Government has not yet made a final decision but is reasonably expected to do so.

The contingency reserve also includes expenses associated with the Government’s major asset sales and associated administration costs.