Page Header
Home | Search | Site Map | Help

Previous PageTable Of ContentsNext Page

Statement 6: Expenses and Net Capital Investment

Horizontal Line

Horizontal Line

Part II: Overview of General Government Net Capital Investment and Capital Appropriations

Table 3: Estimates of Commonwealth General Government
Net Capital Investment(a)

(a) Net capital investment is defined as the change in the balance sheet value of non-financial assets (for example, property, plant and equipment). There are some significant classification differences between the net capital investment estimates reported in this Statement - which is prepared using accounting standard estimates of non-financial assets - and the GFS estimates used in the calculation of the fiscal balance.

Net capital investment for the general government sector is estimated at $206 million in 2000-01 and $2.1 billion over the forward years.

The contraction in net capital investment in 2000-01 largely reflects property sales in the Department of Defence, the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and DOFA.

Estimates presented in Table 3 are disaggregated and are more fully explained in Part III of this statement, which deals with expenses and net capital investment by portfolio.

Reconciliation of Net Capital Investment since the 1999-2000 Budget

Table 4: Reconciliation of Estimates of Commonwealth General Government Net Capital Investment(a)

(a) Net capital investment is defined as the change in non-financial assets. Capital policy decisions as shown above do not include capital measures that fall outside this definition, for example equity injections to reduce an agency's balance sheet liabilities.

Table 4 provides a reconciliation of the 2000-01 Budget, MYEFO and 1999-2000 Budget net capital investment estimates, showing the effect of policy decisions and economic parameter and other variations since the estimates were published in the 1999-2000 Budget.

The variations in capital investment estimates since MYEFO reflect the impact of policy decisions and other changes.

Policy Decisions

The effect of policy decisions has been to increase net capital investments by $35 million in 1999-2000, decrease net capital investment by $197 million in 2000-01, increase net capital investment by $11 million in 2001-02 and decrease net capital investment by $82 million in 2002-03. These movements are largely due to:

Parameter and Other Variations

Parameter and other variations since MYEFO have led net capital investment to decrease by $287 million in 1999-2000, remain unchanged in 2000-01, increase by $421 million in 2001-02 and by $266 million in 2002-03. These variations are largely due to:

Chart 1: Capital Expenditure in General Government Agencies(a)

Chart 1:  Capital Expenditure in General Government Agencies

(a) Capital expenditure is defined as the purchase of non-financial assets exclusive of inventories.

Chart 1 shows that the Commonwealth is moving towards agencies funding a greater proportion of their capital expenditure from internal sources. This reflects the adoption of the accrual budgeting framework, which funds agencies for the full price of their inputs, including for the depreciation of their assets. Accordingly, agencies are now able to budget and fund internally the replacement of capital assets as their useful life comes to an end.

Chart 2: Summary of Capital Appropriations

The Government anticipates making an aggregate capital investment of $5.1 billion in 2000-01 and a total of $13.2 billion over the Budget and forward years.

The large increase in administered capital in 2000-01 relates to the Commonwealth's commitment that the States and Territories will be no worse off under the implementation of The New Tax System. The States and Territories will be advanced $1.7 billion in 2000-01, an investment in a financial asset from the Commonwealth's perspective, which will be repayable without interest.

Four agencies account for three-quarters of the capital appropriations over the Budget and forward years:

The Government is providing the ABC with a $150 million loan facility to assist in the second stage of its relocation to new premises in Ultimo, New South Wales and to enable the ABC to re-finance, on budget, current commercial debt facilities as they mature.

Horizontal Line

Previous PageTable Of ContentsNext Page