Total accrual expenses were $280.1 billion in 2007‑08, $0.4 billion lower than the estimate provided in the 2008‑09 Budget. The major downward variations from the 2008‑09 Budget estimates for 2007‑08 include:
- an overstatement at budget of the Department of Education, Employment and Workplace Relations' expenses of $987 million following the transfer of some programs in 2007-08 from the former Departments of Education, Science and Training, and Employment and Workplace Relations;
- lower than expected expenses of $300 million in relation to the provision of GST revenue to the States and Territories due to a weaker than expected GST receipts outcome;
- lower than estimated civilian superannuation expenses of $268 million primarily driven by the difference in planned asset earnings, discount rate and accrual estimates used to calculate the superannuation expenses and liabilities for outcomes and revised budget estimates;
- lower than anticipated expenses of $271 million across a range of health programs, including medical indemnity, pharmaceutical and drug related programs;
- a decrease of $209 million in expenses for the AusLink program mainly owing to an auditing adjustment requiring certain prepayments relating to progress in 2006‑07 to be expensed in that financial year, rather than in 2007‑08 as previously expected;
- lower than anticipated subsidy expenses of $99 million to providers of residential care due to lower than expected take-up of aged care places, and delays in achieving building and development milestones under the capital grants program; and
- lower than estimated expenses of $88 million in Exceptional Circumstances drought relief payments due to lower than anticipated take-up of this demand-driven program.
The lower than expected expenses in 2007-08 are partly offset by the regular provision for underspends included in the contingency reserve at the Mid-Year Economic and Fiscal Outlook 2007-08.
The downward variations were partly offset by higher than expected expenses across a number of programs, including:
- a change in accounting treatment for concessional loans of $638 million following the review foreshadowed in the 2008‑09 Budget (further details can be found in Part 2). This is offset in part by a variation of $235 million in non‑taxation revenue resulting from this change, leaving a net impact of $403 million;
- higher than expected claims received of $471 million under the Superannuation Co‑contribution scheme owing to a larger than estimated amount of prior year claims processed late in 2007‑08;
- greater than expected expenses for Fuel Tax Credits of $250 million relating to prior years' claims and growth in fuel consumption for eligible activities;
- an increase in expenses of $160 million in Family Tax Benefits claimed through the Australian Taxation Office, owing to higher than expected entitlement amounts and take-up rates;
- greater than expected write‑offs of tax penalties of $146 million by the Australian Taxation Office;
- higher than expected demand for a range of medical services of $139 million, including general practitioner, enhanced primary care, operations, diagnostic imaging and pathology services;
- higher than expected growth in claims for the Research and Development Tax Offset of $111 million; and
- higher than expected participation in private health insurance, increasing rebate payments by $91 million.
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
- From the 2008‑09 Budget purchases of specialist military equipment are treated as net capital investment rather than as expenses.