Technical notes
General
- Normal rounding rules apply where the end digit is less than five. In accordance with Department of Finance and Administration guidelines, where the end digit equals five the numbers are rounded up to the next digit. Totals and percentages are calculated on un-rounded totals. Columns may not add due to rounding.
- This budget paper details total ODA which includes expenditure by Other Government Departments (OGDs) that is classifiable as ODA as outlined by the Development Assistance Committee (DAC) of the OECD.
- Where real figures are presented the Non-Farm Gross Domestic Product (GDP) Implicit Price Deflator has been used.
- All estimates are exclusive of recoverable GST.
- All amounts are in Australian dollars (AUD) unless otherwise indicated.
- ‘Current prices’ express values in terms of the prices in the year of expenditure. ‘Constant prices’ express values adjusted for inflation in terms of a chosen year, which is the financial year 2004–05 in this publication. A ‘real’ increase or decrease refers to the change in figures adjusted for inflation (that is based on constant prices). A ‘nominal’ increase or decrease refers to the face value change between figures that have not been adjusted for inflation (that is based on current prices).
- Unless stated the source of data is AusAID.
- Unless stated, increases quoted are based on a comparison of 2004–05 and 2005–06 budget figures.
- In 2001, the DAC officially converted from publishing ratios in terms of ODA/Gross National Product (GNP) to ODA/Gross National Income (GNI). In line with this conversion, all information published on the aid budget uses the concept of GNI.
Accrual expenses and cash
The Australian Government moved to an accrual budgeting framework in 1999–2000 and subsequently budget estimates, for example Tables 5 and 6, are presented in terms of expenses. Multi-year liabilities, such as payments to the ADF, IDA and IFAD are recorded as an expense at the time of signing the Instrument of Commitment, not when the cash is paid. This accounting treatment is used in AusAID’s financial statements, available in the Foreign Affairs and Trade Portfolio Budget Statement on the Internet at http://www.dfat.gov.au/dept/budget.
Total ODA estimates (for example, Table 1) are adjusted from an expense by excluding the total expense commitment for new multi-year liabilities but including the cash paid to those commitments. Adjustments are also made for items such as movements in creditors and depreciation.
Estimates of sectoral expenditure are in cash terms throughout as they relate to total ODA which is reported in cash. A number of tables in this Budget Statement include an ‘adjustment’ figure prior to calculating ODA. This figure includes adjustments for depreciation, investment, and expected net change in creditors. Table 7 also details the adjustments to multi-year liabilities, such as the multilateral development banks, to convert expenses to cash.
Apart from those individual estimates affected by multi-year liabilities, the difference between cash and expenses is minimal. The differences can be summarised as follows:
- The Pacific expense estimate is less than cash as the Nauru Settlement Treaty ($3.17 million in 2005–06) was recorded as an expense in 1993–94. In Table 1 and Table 4, the $3.17 million cash for the Nauru Settlement is included with the flows to Nauru to give a more comprehensive picture of Australia’s estimated contribution in 2005–06.
- The Multilateral Replenishment expense estimates (see Table 6) are $84.7 million in 2005–06 representing the estimated total value of new multi-year contributions Australia expects to enter next financial year. Figures in Chapter 7 reflect the ongoing cash contributions Australia is making to these international institutions ($208.4 million), to give a more accurate picture of the flows to these organisations within the budget year. With the exception of Multilateral Replenishments all other global program expense estimates are equal to cash.
- AusAID received the $1 billion appropriation for the Australia–Indonesia Partnership for Reconstruction and Development (AIPRD) through the 2004–05 Portfolio Supplementary Additional Estimates. In addition, AusAID has received supplementary funding to implement the AIPRD through the 2004–05 Portfolio Supplementary Additional Estimates and the 2005–06 Portfolio Budget Statements. On current estimates, cash disbursements of this funding will be $10.8 million in 2004–05 and $132.1 million in 2005–06. Figures (in Tables 1, 2 and 7) reflect the estimated total cash disbursements each year rather than amounts appropriated or expected to be expensed.
Estimated total ODA
In estimating total ODA flows, AusAID begins with budget estimates for particular countries. To these are added estimates of expenditure from regional and global programs that do not have country allocations specified at the time of the budget. These estimates reflect previous expenditure patterns, and are subject to change throughout the year. Estimated total ODA flows (Table 1) also include ODA-eligible expenditure by OGDs.
Estimated sectoral expenditure
While the key sectors of Governance, Education, Health, Rural Development and Infrastructure remain high priorities for the Australian aid program, centralised allocations are not made for expenditure in these sectors. Programming decisions are made on the basis of individual country strategies that are developed in consultation with partner governments, addressing their priority needs.
Expenditure in any particular sector is thus the result of programming decisions, made in accordance with government policy but not determined at budget time. Estimates published in this Budget Statement are qualified and are subject to programming decisions throughout the year.
Sectoral expenditure estimates reflect past trends in expenditure recorded in AusAID’s Activity Management System (AMS) for 2002–03, 2003–04 and 2004–05. The AMS tracks actual and estimated expenditure on individual projects. Each project is allocated sector codes, in accordance with DAC guidelines, which reflect the primary focus of the project, as well as attributing secondary codes to track indirect expenditure. The 2004–05 estimated expenditure extracted from the AMS in February 2005 includes planned expenditure to the end of the year, which is adjusted to account for over-programming. Estimates are then added to this for sectoral flows from multilateral organisations, based on these organisations’ reports, and OGD expenditure estimates that are ODA-eligible. Further information relating to the value of imputed flows from multilateral organisations can be obtained from the Information and Research Services Unit, AusAID (ph 02 6206 4000).