Australian Government, 2012‑13 Budget

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 an accrual accounting basis. General government sector expenses are expected to decline as a share of Gross Domestic Product (GDP) in 2012‑13, reflecting the Government's commitment to fiscal discipline.

This Budget includes a range of measures to return the Budget to surplus in 2012‑13, including $16.3 billion of savings in expenses and net capital investment. The largest savings include further efficiencies and targeted reductions in defence funding ($5.5 billion over four years) along with slower growth in official development assistance (ODA) ($2.9 billion over four years) arising from a one year deferral in the Government's commitment to increase ODA to 0.5 per cent of Gross National Income. The most significant areas of expenditure in 2012‑13 are for the social security and welfare (35.0 per cent of total expenses), other purposes (18.6 per cent), health (16.2 per cent), and education (7.9 per cent) functions.

The strongest growth in expenses across the Budget and forward estimates is expected to occur in the housing and community amenities (22.1 per cent), other purposes (18.2 per cent), fuel and energy (16.5 per cent), agriculture, forestry and fishing (10.8 per cent) and health (8.2 per cent) functions. These increases are partly offset by declines in the recreation and culture (‑14.3 per cent) and other economic affairs (‑8.1 per cent) functions. The 2012‑13 Budget includes funding for a number of key Government policy priorities. The Government has announced a five year $3.7 billion package of reforms to Australia's aged care system, with a net Government investment of $577 million. This includes more home‑based services, better access to residential aged care facilities, and making the system fairer, more transparent and more responsive to the needs of older Australians.

The Government will also provide assistance to people with a disability and their families and carers through implementation of the first stage of a National Disability Insurance Scheme (NDIS). Funding of $1.0 billion over four years for the first stage will test key features of an NDIS in up to four launch locations, to be announced following negotiations with State and Territory governments.

The Government will also spend an additional $2.9 billion over four years to ease the cost of living pressures on families and unemployed people through the Spreading the Benefits of the Boom package.

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