Expenses

Total accrual expenses were $195.3 billion in 2004-05, an increase of $281 million (0.1 per cent) from the estimate provided in the 2005-06 Budget. Expenses increased by:

$1.0 billion due to higher than expected write-offs of tax penalties by the Australian Taxation Office, following a review of the collectability of its outstanding penalties;
$490 million due to a higher than expected impact of a change in accounting policy adopted in the Budget which recognises certain administered programmes by the Australian Taxation Office in the year of accrual rather than the year of payment;
$152 million due to a one-off payment to residential aged care providers for improved information technology infrastructure, financial reporting and training;
$131 million in depreciation expenses due mainly to a number of significant revaluations of property by the Department of Defence; and
$98 million in nominal superannuation interest expense due to an actuarial revaluation of the Department of Defence’s superannuation liabilities.

These increases were partially offset by:

a decrease in grant expenses of $796 million including from delays in the finalisation of funding agreements in education and research programmes ($231 million) and lower than expected take up in a range of programmes, including health ($383 million) and agriculture ($94 million);
a decrease in personal benefit expenses of $363 million primarily due to a lower than expected impact from the change in accounting policy adopted in the Budget for Family Tax Benefit entitlements; and
a decrease in wages and salaries expense of $561 million due to a reduction in accrued leave expenses, largely in the Department of Defence, and lower than anticipated staffing levels across a number of agencies.

Table 3 provides information on Government Finance Statistics (GFS) general government sector expenses by function.

Table 3: Australian Government general government sector expenses by function

Asset sale related expenses are treated as a component of the contingency reserve.