Statement 6: Expenses and Net Capital Investment
- Overview
- Reconciliation
of net capital investment since the
2001-02 Budget - Net capital investment by function
Part II: General government net capital investment
Overview
In 2002-03, forecast net capital investment has increased by $326 million since the 2001-02 MYEFO, largely reflecting the construction of a purpose-built permanent immigration reception and processing centre on Christmas Island and lower than forecast net proceeds from sales of Defence and Defence Housing Authority (DHA) property.
Net capital investment estimates for the period from 2001-02 to 2005-06 are provided in Table 18.
Table 18: Estimates of total Commonwealth
general government
net capital investment
(a) Real growth is calculated using the non-farm gross domestic product (GDP) deflator.
Negative net capital investment of $725 million is expected in 2002-03, largely reflecting the ongoing property sales programmes of the Department of Defence and the DHA.
Reconciliation of net capital investment
since the
2001-02 Budget
Table 19 provides a reconciliation of the 2001-02 Budget, 2001-02 MYEFO and 2002-03 Budget net capital investment estimates, showing the effect of policy decisions and economic parameter and other variations since the estimates were published in the 2001-02 Budget.
Table 19: Reconciliation of Commonwealth general government net capital investment
Policy decisions
Policy decisions since the 2001-02 MYEFO affecting net capital investment estimates include a number of initiatives associated with the introduction of new domestic security arrangements and programmes:
- $27.5 million over four years (with $5.1 million in associated depreciation) to Customs for provision of additional container and pallet x-ray machines and the development of database and analysis tools for border control authorities with access to international airline reservation and departure control systems;
- $12.9 million over five years (with $5.8 million in associated depreciation) to the Australian Federal Police (AFP) to enable a doubling of the AFP strike team capacity, provide enhanced access to telecommunications infrastructure in remote locations, provide equipment for use in close personal protection to enhance counter-terrorism capacity and enable an expansion of the Law Enforcement Cooperation Programme through placing additional AFP officers overseas; and
- $136 million over four years for the Department of Defence for construction of training facilities for a permanent Tactical Assault Group; to build facilities for a permanent Incident Response Regiment to respond to chemical, biological, radiological, nuclear and explosive (CBRNE) incidents, to improve security infrastructure around military bases and improve IT equipment within the Defence Signals Directorate.
Other policy decisions since the 2001-02 MYEFO affecting net capital investment estimates, include:
- $74.7 million in 2001-02 for the Department of and Immigration, Multicultural and Indigenous Affairs (DIMIA) and $120.3 million (excluding depreciation of $3.9 million) in 2002-03 provided to DIMIA and the Department of Transport and Regional Services for the construction of a purpose-built permanent immigration reception and processing centre on Christmas Island;
- $65.4 million over four years (from 2003-04) to improve the facilities at the Australian Institute of Sport's Canberra Campus;
- A reduction of $12 million over four years for capital funding for the National Archives of Australia;
- $152 million over four years to enable the Department of Defence to make up an expected shortfall in its non-property sales programme proceeds, which were being invested in Defence capability;
- $3.9 million in 2002-03 (with associated depreciation of $3.4 million over four years) to the Department of Employment and Workplace Relations to enhance IT underpinning the Job Network; and
- Provision of an additional $6.4 million to the ATO to enable modifications to IT systems to support administration of Superannuation Guarantee provisions. An additional $2.8 million is also being provided to the ATO in 2001-02 to support the implementation of the baby bonus.
Parameter and other variations
Since the 2001-02 MYEFO, parameter and other variations have led to an increase in estimated net capital investment of $140 million in 2002-03. Variations in the Budget and forward years are largely due to:
- Revised forecasts of proceeds from planned Defence property sales;
- Lower levels of net property investment proceeds from the DHA (including sale and leaseback programme); and
- Reduction in certain classes of inventory by Defence.
Net capital investment by function
Table 20 provides estimates for Commonwealth general government net capital investment by function for the period 2001-02 to 2005-06.
Table 20: Estimates of Commonwealth net capital investment by function
Net capital investment is expected to fall between 2001-02 and 2002-03, largely due to movements within the Defence and Housing and Community Amenities functions. This largely reflects the rephasing of property sales by the Department of Defence from 2001-02 to 2002-03 and a change to the Defence Housing Authority's building and sales programme.
The remaining functions are expected to record positive net capital investment in 2002-03. This includes:
General public services, a net increase in estimated net capital investment to reflect:
- Investment by the ANSTO in a new nuclear reactor at Lucas Heights; investment by the ATO in IT infrastructure; the Department of Foreign Affairs and Trade's investment in an updated secure communications system; CSIRO's investment in finance leases for accommodation and the ABS's fitout for its new headquarters.
- Largely offset by property sales by the Department of Finance and Administration and CSIRO, and the run-off of the Commonwealth motor vehicle fleet finance leases as the fleet is moving onto operating leases.
Public order and safety, the purchase of additional container and pallet x-ray machines by the Australian Customs Service and other equipment related to new domestic security measures.
Health, the investment in IT infrastructure by the Department of Veterans' Affairs and the Health Insurance Commission.
Social Security and Welfare, the investment in IT infrastructure for Centrelink and the Department of Veterans Affairs.
Recreation and Culture, the completion of ABC building works at Ultimo in Sydney and at East Perth, the divestment of ABC properties at Adelaide Terrace in Perth and at Gore Hill in Sydney, the ongoing digital television conversion program by the ABC and SBS and the refurbishment of the National Gallery of Australia and capital works at the Australian Institute of Sport.
Transport and Communications, the construction of common use infrastructure by the Department of Transport and Regional Services, to support the Asia Pacific Space Centre project on Christmas Island.
Other Economic Affairs, the investment by DIMIA in enhanced detention facilities on mainland Australia and the construction of a purpose built permanent immigration reception and processing centre on Christmas Island.
