Statement 6: Expenses and Net Capital Investment
Statement 6 presents estimates of general government sector expenses and net capital investment, allocated according to the various functions of government, on a fiscal balance basis. General government sector expenses are expected to decline as a share of Gross Domestic Product (GDP) in 2013‑14, reflecting the Government's commitment to fiscal discipline.
The Government has made $18.3 billion in savings to expenses and net capital investment in this Budget. Savings have been achieved through reductions to some welfare expenses including through changes to Family Tax Benefits payments. Other savings will be delivered through the deferral of Australia's official development assistance (ODA) growth target by one year ($1.9 billion over four years), and from the realignment of indexation for the Medicare Benefits Schedule to the financial year ($664 million over four years).
Lower carbon pricing revenue as a result of updated carbon price estimates will be offset by automatic adjustments and other carbon‑related changes, ensuring the overall impact is broadly budget neutral. The reduction in expenses is from reducing industry assistance in line with the lower price, deferring tax cuts scheduled for 2015‑16, changes to the profile of investments in clean and renewable energy, and changes to land sector initiatives.
The Government will provide $14.3 billion in additional funding over seven years from 2012‑13 to move to full implementation of DisabilityCare Australia (the national disability insurance scheme) by 1 July 2019 to provide care and support for people with significant and permanent disability. This includes the launch funding of $2.4 billion, and new funding of $1.9 billion for transition to a full scheme through to 1 July 2017, $3.8 billion in 2017‑18 and $6.2 billion in 2018‑19.
The Government will also provide an additional $9.8 billion over six years from 2014‑15 to implement a new needs‑based funding model for schools, as part of the National Plan for School Improvement. Both of these initiatives will be progressed with the support of the States and Territories.
Expense functions with the strongest real growth in 2013‑14 include Transport and Communications (26.0 per cent), Housing and Amenities (24.5 per cent), and Fuel and Energy (20.4 per cent). Functions with declining funding in 2013‑14 include General Public Services (‑11.8 per cent) and Recreation and Culture (‑0.6 per cent).
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