General government net capital investment
In 2004-05, forecast net capital investment has increased by $463 million since the 2003-04 MYEFO. This increase is due to the combined effect of new policy decisions of $189 million and parameter and other variations of $274 million.
Net capital investment estimates for the period from 2003-04 to 2007-08 are provided in Table 18.
Table 18: Estimates of total net capital investment
- As published in the Mid-Year Economic and Fiscal Outlook 2003-04.
- Real growth is calculated using the non-farm gross domestic product (GDP) deflator.
Net capital investment of $18 million is expected in 2003-04, largely reflecting investment in inventory to protect national public health against possible disease outbreaks such as Avian influenza, various construction projects, including activities associated with the construction of a nuclear reactor by the Australian Nuclear Science and Technology Organisation and asset acquisitions and parameter and other effects. Asset acquisitions include: investment by the Department of Finance and Administration in its property portfolio; investment in computer equipment and software by the Australian Customs Service, the Health Insurance Commission and Centrelink; investment in accommodation, transport and communications equipment by the Australian Federal Police; investment in new meteorological radars; and provision of infrastructure in Australia’s Indian Ocean territories. These investments are partly offset by ongoing property sales programmes by the Department of Defence and the Defence Housing Authority.
Reconciliation of net capital investment since the
2003-04 Budget
Table 19 provides a reconciliation of the 2003-04 Budget, 2003-04 MYEFO and 2004-05 Budget net capital investment estimates, showing the effect of policy decisions and economic parameter and other variations since the estimates were published in the 2003-04 Budget.
Table 19: Reconciliation of net capital investment
Discussion of changes between the 2003-04 MYEFO and the 2004-05 Budget, shown in the table above, can be found in Statement 2 (in the section titled ‘Variations in net capital investment estimates’). For further information on capital measures since MYEFO can be found in Budget Paper No. 2, Budget Measures 2004-05.
Net capital investment estimates by function
Table 20 provides estimates for Australian Government general government net capital investment by function for the period 2003-04 to 2007-08.
Table 20: Estimates of net capital investment by function
Net capital investment is expected to rise between 2003-04 and 2004-05 reflecting: various construction projects, including those in the Department of Finance and Administration’s property portfolio, investment by the Australian Nuclear Science and Technology Organisation in a new nuclear reactor; investment in information technology by the Australian Customs Service, Centrelink, the Department of Family and Community Services and the Health Insurance Commission; and investment in meteorological radars by the Bureau of Meteorology and equipment by the Australian Federal Police. This is partially offset by receipts received from property sales by the Department of Defence.
While the bulk of Defence’s current property sales programme is expected to conclude by 2004-05, rephasing of the Department of Defence’s capital investment programme beyond the current forward estimates results in negative net capital investment in the Defence function across the Budget and forward estimates years.
Net capital investment decreases across the forward years as a result of: the rephasing of Defence’s capital investment; and the conclusion of various construction projects and information technology-based projects or other asset acquisitions.
Significant investments by function include:
- General Public Services for the investment by the Department of Finance and Administration for its property portfolio including construction of the Adelaide Law Courts building, Christmas Island Immigration Reception and Processing Centre, Villawood Detention Centre and ANZAC Park East and West, investment by the Australian Nuclear Science and Technology Organisation in a new nuclear reactor at Lucas Heights and construction, refurbishment and relocation of some overseas posts by the Department of Foreign Affairs and Trade;
- Public Order and Safety for investment in computer equipment and software by the Australian Customs Service, including for the Cargo Management Re-engineering Programme, and investment in accommodation, transport and communications equipment associated with overseas deployments by the Australian Federal Police;
- Health for investment in inventory to protect national public health against possible disease outbreaks such as Avian influenza, and for investment in information technology infrastructure by the Health Insurance Commission;
- Social Security and Welfare for investment in information technology infrastructure for Centrelink;
- Recreation and Culture due to the sale of three FM radio broadcasting licenses in 2003-04, delays in the divestment of Australian Broadcasting Corporation properties at Adelaide Terrace in Perth and at Gore Hill in Sydney, capital works at the Australian Institute of Sport and the National Gallery of Australia and the redevelopment of the Australian War Memorial’s post-1945 galleries;
- Housing and Community Amenities due mainly to changes within the Defence Housing Authority’s property portfolio including increased acquisitions and construction and variations to the forecast sale and leaseback programme;
- Transport and Communications for the provision of infrastructure on the Indian Ocean Territories and for investment in information technology infrastructure in the Department of Transport and Regional Services, the Civil Aviation and Safety Authority, and the Australian Communications Authority; and
- Other Economic Affairs for investment by the Bureau of Meteorology in replacing older equipment with new meteorological radars and by the Department of Immigration and Multicultural and Indigenous Affairs for upgrade, development and redevelopment work associated with immigration detention facilities.
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