Statement 6 presents estimates of general government expenses and net capital investment on a Government Finance Statistics (GFS) accrual accounting basis. The statement includes information on the allocation of Australian Government funds to the various functions of government. These functions are based on an international standard classification of functions of government that is incorporated into the GFS framework.

The first part of this statement provides information on trends in estimated expenses while the second part presents trends in net capital investment estimates. Estimates are on an Australian Government general government sector basis.

Statement 6 focuses on short to medium-term trends in estimated expenses and their underlying determinants. Consistent with this emphasis, much of Statement 6 explains year on year changes across the forward estimates period.

Further information on portfolio and agency expenses, capital movements, major outputs and administered items may be found in the respective Portfolio Budget Statements.

The main trends are:

• general government expenses are forecast to remain steady at 21.5 per cent of GDP in 2007-08 and then increase to 21.8 per cent of GDP in 2010-11;
• in 2007-08, the social security and welfare, health, defence and education functions together account for approximately 75 per cent of total expenses, with social security and welfare accounting for approximately 41 per cent of total expenses;
• in real terms, the strongest growth across the budget and forward estimates is expected to occur in the defence, general public services, education, social security and welfare, and health functions, with growth in estimated expenses for other functions either being largely stable or declining; and
• net capital investment in 2007-08 largely reflects continued investment in various construction projects, information technology upgrades and Department of Defence capital works projects.