This Part reports on departmental expenses and net capital investment, by agency. The data are presented on the same basis as data in Statement 5 of Budget Paper No. 1. Both sets of data are presented on the basis of external accounting and financial reporting standards. These standards present information in terms of accrued expenses and accrued revenue.

The main external standards used are:

• the Australian Bureau of Statistics' (ABS) accrual Government Finance Statistics (GFS) publication, Australian System of Government Finance Statistics: Concepts, Sources and Methods, (cat no. 5514.0), which in turn is based on the International Monetary Fund (IMF) accrual GFS framework; and
• Australian Accounting Standards (AAS), being AASB 1049 Whole of Government and General Government Sector Financial Reporting (AASB 1049) and other applicable Australian Equivalents to International Financial Reporting Standards (AEIFRS).

Machinery of government changes have implications for how information is presented in the tables in Part 3. For example, if an agency was abolished in 2015‑16 it will have estimated expenses for 2015‑16 reflecting expenditure in part of that year. If an agency was created in 2015‑16, it will have estimated expenses for both 2015‑16 and 2016‑17, and for projected out years.

Departmental Expenses Table

Table 3.1 presents departmental expenses by agency. Departmental expenses reduce the net worth of agencies. It includes expenses controlled by agencies such as payment of wages and purchases of goods and services. It excludes administered expenses — not controlled by agencies - paid on behalf of government such as social benefits and grants to the States. It also excludes capital expenditure which does not reduce net worth.

(a) Estimates of inter-agency transactions are included in the whole of government and inter-agency amounts. The entry for each portfolio does not include eliminations for inter-agency transactions within that portfolio.

(b) Agency estimates are reported on an AEIFRS basis. AEIFRS expenses considered other economic flows include net write-down and impairment of assets and fair value losses.

(c) The NDIA is a Commonwealth corporate entity and as such is not required to report expenses separately as administered or departmental. However, the NDIA's expenses incurred in the provision of reasonable and necessary care and support to clients (administered in nature) will be significant over the forward estimates compared to other Commonwealth corporate entities. Additionally, these expenses are jointly funded by the Commonwealth and participating states and territories. To provide a better view of these NDIA expenses, Table 3.1 shows the split between expenses that are departmental or administered in nature and provides a total excluding NDIA administered in nature.

Net Capital Investment Table

Table 3.2 presents net capital investment by agency. Net capital investment represents expenditure by agencies on non-financial assets. It includes expenditure on assets such as defence equipment. It excludes any investment in financial assets such as loans.

(a) Estimates of inter-agency transactions are included in the whole of government and inter-agency amounts. The entry for each portfolio does not include eliminations for inter-agency transactions within that portfolio.

(b) Agency estimates are reported on an AEIFRS basis. AEIFRS movements in non-financial assets considered other economic flows include net write-down and impairment of non-financial assets and assets recognised for the first time. They also include Contingency Reserve movements in non-financial assets.

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