Statement 6:
Expenses and Net Capital Investment1
(Continued)
Overview
Australian Government general government sector expenses are expected to increase slowly in real terms in 2010‑11 and across the forward years. Total expenses are expected to decrease as a percentage of GDP over the forward estimates.
Table 1: Estimates of general government sector expenses
- GDP forecasts for the 2009‑10 Budget were prepared according to the System of National Accounts 1993, while forecasts for MYEFO and the 2010‑11 Budget were prepared according to the System of National Accounts 2008.
- Real growth is calculated using the Consumer Price Index.
The Government's fiscal stimulus packages, which were introduced to cushion the impact on Australia of the global financial crisis, continue to influence the total expense estimates in 2010‑11. Real growth slows in 2010‑11 and 2011‑12, reflecting the temporary nature of these packages, then levels out in 2012‑13 and 2013‑14.
In underlying cash terms, real growth in payments is negative 0.6 per cent in 2011‑12, 1.7 per cent in 2012‑13 and 1.9 per cent in 2013‑14. This is consistent with the Government's fiscal strategy to hold real growth in spending to 2.0 per cent per annum when economic growth returns to above trend levels.
1 The figures in this statement are presented on an accrual basis and may differ from cash payments. The difference between the two measures is because expenses are recorded when they are incurred (for example when the good or service is received) while payments are reported when the cash is exchanged.
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