Australian Government, 2011‑12 Budget
Budget

Statement 6: Expenses and Net Capital Investment (Continued)

General government net capital investment

Net capital investment is broadly defined as acquisitions of non‑financial assets less depreciation expenses. It provides a measure of the overall growth in capital assets (including buildings and infrastructure, specialist military equipment, and computer software) after taking into account depreciation and amortisation as previously acquired assets age.

Australian Government general government net capital investment is expected to be $4.4 billion in 2011‑12, $1.3 billion lower than in 2010‑11. This is predominantly due to a reduction in the acquisition of Defence assets, lower planned investments in water, and a number of items in the Contingency Reserve.

Table 18: Estimates of total net capital investment

Table 18: Estimates of total net capital investment

  1. Real growth is calculated using the Consumer Price Index. Real net capital investment is rising in 2013‑14. The negative real growth rate shown in that year is a function of the negative net investment in 2012‑13.

Reconciliation of net capital investment since the 2010‑11 Budget

A reconciliation of the net capital investment estimates, showing the effect of policy decisions and parameter and other variations since the 2010‑11 Budget, is provided in Table 19.

Table 19: Reconciliation of net capital investment estimates

Table 19: Reconciliation of net capital investment estimates

  1. Excludes secondary impacts on public debt interest of policy decisions and offsets from the contingency reserve for decisions taken.

The forecast net capital investment for 2011‑12 is largely unchanged since MYEFO. Major parameter and other variations over the forward estimates include the re‑profiling of capital acquisitions by Defence to better align with strategic requirements. The significant reduction in net capital investment in 2012‑13 is due to a number of items in the Contingency Reserve.

A discussion of changes between 2010‑11 MYEFO and the 2011‑12 Budget, shown in the table above, can be found in Statement 3 (in the section titled 'Net capital investment estimates'). Further information on the capital measures since MYEFO can be found in Budget Paper No. 2, Budget Measures 2011‑12.

Net capital investment estimates by function

Estimates for Australian Government general government sector net capital investment by function for the period 2010‑11 to 2014‑15 are provided in Table 20.

Table 20: Estimates of net capital investment by function

Table 20: Estimates of net capital investment by function

As in previous years, the most significant component of the Government's net capital investment in 2011‑12 occurs in the defence function. These investments reflect the acquisition of military equipment and the construction of support facilities. Such investments can experience uneven expenditure throughout their development and life cycle extending over long periods of time, and can contribute to fluctuations in levels of net capital investment from year to year.

Major factors contributing to changes in net capital investment, expected to occur in the following functions, include:

  • Defence — investment by the Department of Defence (Defence) on various capital projects including facility and base infrastructure upgrades at: HMAS Creswell (Australian Capital Territory), Robertson Barracks (Northern Territory), and the Royal Australian Air Force Bases at Amberley (Queensland), Edinburgh (South Australia), Pearce (Western Australia) and Tindal (Northern Territory).
    • There are also a number of construction projects related to the introduction of Defence capabilities including Enhanced Land Force Facilities Stage 1 and Stage 2, Hardened and Networked Army Facilities and Airborne Early Warning and Control Facilities. Construction will occur at various Defence sites and locations across Australia.
    • Major capital equipment expected to be delivered in the forward estimates period includes the remaining Super Hornets, Bushmaster protected mobility vehicles, Airborne Early Warning and Control aircraft, an additional strategic airlift aircraft, armed reconnaissance and multi‑role helicopters, upgraded armoured personnel carriers, air‑to‑air refuelling aircraft, upgraded F/A‑18 'Classic' Hornets, purchase of the United Kingdom's Bay Class amphibious ship 'Largs Bay', the first of the new Air Warfare Destroyers, a new class of Landing Helicopter Dock amphibious ships, upgraded anti‑ship missile defence for Anzac class frigates, tactical unmanned aerial vehicles, new light vehicles, new towed Howitzers, enhanced command and control battle management and communication systems for land forces, including enhanced satellite communications.
    • The Government will reprogram $1.3 billion of funding over the forward estimates for the Defence capital investment program to better align it with Defence's strategic requirements. The reprogramming will support the Department of Defence in delivering the military capabilities set out under Force 2030 in the 2009 Defence White Paper.
  • public order and safety — the fit out of the central office accommodation for the Australian Security Intelligence Organisation and the fit out of Australian Federal Police accommodation at Australian airports;
  • general public services — investment in major property projects managed by the Department of Finance and Deregulation (including construction of new accommodation for the Australian Security Intelligence Organisation), refurbishment and relocation of various overseas missions by the Department of Foreign Affairs and Trade, replacement of a research vessel for the Commonwealth Scientific and Industrial Research Organisation financed through the Education Investment Fund, and investment by several agencies in information technology including the ATO and the Department of Finance and Deregulation;
  • agriculture, forestry and fishing — investment in water entitlements under the Water for the Future package to address water over‑allocation in the Murray‑Darling Basin, which is expected to peak in 2011‑12;
  • housing and community amenities investment by the DHA in defence housing which has returned to business as usual following completion of its Nation Building Economic Stimulus funded new housing in 2010‑11;
  • health — write‑downs in the National Medical Stockpile and delays in information and communications technology investment associated with the Government's Health Reform agenda; and
  • other economic affairs — increased investment in immigration detention facilities in 2010‑11 and 2011‑12. The high level of investment in 2011‑12 is a result of delays in the construction of a detention centre at Northam, Western Australia, which commenced in 2010‑11.

Table 21 reports the acquisition of non‑financial assets by function before taking into account depreciation or amortisation.

Table 21: Australian Government general government purchases of
non‑financial assets by function

Table 21: Australian Government general government purchases of non‑financial assets by function

Trends in Australian Government staffing

Trends in the estimated annual average staffing level (ASL2) for all agencies in the General Government Sector are reported in Table 22 below. The data provides a summary of people employed by the Australian Government, including all Defence Force personnel and those employed by Statutory Authorities.

ASL data was first collected and published in the 2001‑02 Budget papers. Since 2001‑02 there has been an increase of 50,211 ASL (or approximately 24 per cent).

Table 22: Estimates of Average Staff Levels (ASL)

Table 22: Estimates of Average Staff Levels (ASL)

The 2010‑11 Budget Papers estimated 258,704 ASL in 2010‑11. The current estimate is 261,891 ASL in 2010‑11. The 2011‑12 Budget is expected to result in a modest net increase of 1,104 ASL (0.4 per cent) in 2011‑12 to 262,995 ASL across the General Government Sector. On 21 April 2011 the Government announced an enhanced approach to managing Australian Public Service (APS) staffing levels, including strengthening and updating APS redeployment arrangements and establishing an on‑line register in the Australian Public Service Commission for excess employees seeking redeployment.

Appendix C provides details of ASL at the portfolio and agency level.


2 ASL figures reflect the average number of employees receiving salary or wages over the financial year, with adjustments for casual and part-time staff, to show the average full time equivalent (FTE). ASL figures also include non-uniformed staff and overseas personnel.

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