Expenses and Net Capital Investment
Statement 6 presents estimates of general government sector expenses, allocated according to the various functions of government, and net capital investment, on an accrual accounting basis.
The key points of interest reported in this statement include:
- general government sector expenses are expected to decline as a share of Gross Domestic Product (GDP) in 2010‑11, reflecting the withdrawal of government stimulus spending introduced during 2008‑09 and 2009‑10 to help cushion the impact of the global economic crisis. General government sector expenses are expected to gradually decline as a share of GDP across the forward years;
- significant areas of expenses in 2010‑11 will be in the social security and welfare (32.4 per cent of total expenses), other purposes (19.4 per cent), health (16.0 per cent), education (9.3 per cent) and defence (5.9 per cent) functions;
- the strongest real growth across the Budget and forward estimates period is expected to occur in the transport and communication (31.9 per cent), health (30.7 per cent), mining, manufacturing and construction (20.1 per cent), and social security and welfare (5.4 per cent) functions;
- the Government's health and hospitals reform package (see below) has affected functional expense totals and growth rates, primarily caused by the transfer of general revenue assistance to the States and Territories from the other purposes function to the health function from 2011‑12; and
- net capital investment expenses are expected to increase in 2010‑11, largely due to the projected growth in defence investment.
The Government's fiscal stimulus packages continue to significantly affect trends in expenses by function. Further details are provided in Box 1.
A number of programs have been reclassified during 2009‑10 and these have had a material impact on the functional expenses. More information is provided in Box 2.
On 20 April 2010, the Council of Australian Governments, with the exception of Western Australia, reached agreement on significant reform to Australia's health and hospital system — the establishment of a National Health and Hospitals Network. The package of additional investments, comprising expenses and capital, totals $7.3 billion over five years. More information on this reform is provided in Box 5.
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