Chapter One - Overview > Financial Overview > page 12 of 16
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Financial Overview

Defence's Cash Position

Status of White Paper Funding

Defence's departmental funding in 2004-05 and beyond continues to be based primarily on the allocations approved by the Government in the context of the Defence White Paper. This additional funding now totals $28.9 billion over the 13 years commencing in 2001-02, as shown in Table 1.8, and represents the most specific long-term funding commitment for Defence for more than 25 years.

The additional White Paper funding is being applied to:

  • the Defence Capability Plan, containing a program of capital investment in addition to the investment program already planned ($20.0 billion);
  • provision for the through-life support costs of the capability enhancements in the Defence Capability Plan ($2.9 billion);
  • provision for two per cent real growth in personnel costs from 2004-05 onwards, reflecting the cost of maintaining a highly skilled workforce in a sustainable way ($4.9 billion); and
  • funding a number of budget baseline cost pressures, including logistics shortfalls, assisted by a programme of administrative savings ($1.0 billion).

After taking account of the reprogramming of the Defence Capability Plan agreed by the Government in the 2005 06 Budget, actual expenditure covering the period 2001-02 to 2004-05 totalled $4.046 billion. The 2005-06 Budget includes a further $2.253 billion in White Paper funding. The remaining funding, totalling $22.575 billion, is to be provided over the remainder of the period to 2013-14.

Table 1.8 provides details of White Paper expenditure to date and future allocations in 2005 06 outturned prices.

Table 1.8 Current Status of White Paper Funding Allocations (Outturned 2005-06 prices)(1)(2)
01-02

$m
02-03

$m
03-04

$m
04-05

$m
05-06

$m
06-07

$m
07-08

$m
08-09

$m
09-10

$m
10-11

$m
11-12

$m
12-13

$m
13-14

$m
Total

$m
Major Capital Equipment
Original Allocation 510 1,051 1,506 1,552 1,720 2,311 2,426 2,318 2,844 3,490 - - - 19,728
Reprogramming (3) - -200 - - - - - 228 - - - - - 28
Reprogramming (4) - - -212 -201 -146 -93 - 185 290 168 109 - - 100
Reprogramming (5) - - -500 - - - - 171 175 178 61 - - 85
Reprogramming (6) - - - -75 -313 -387 -138 - 207 140 198 308 220 160
Reprogramming (7) - - 170 - - - - -194 - - - - - -24
Reprogramming (8) 300 -108 -110 -113 -31
1 Revised Capital 510 851 964 1,276 1,561 1,831 2,288 2,708 3,408 3,866 255 308 220 20,046
 
Through-life Support Costs for Defence Capability Plan Projects
Original allocation - - - 195 242 294 432 517 611 652 - - - 2,944
Reprogramming (9) - 8 21 -134 -64 -5 - 13 86 78 - - - 3
2 Revised Allocation - 8 21 61 178 289 432 530 697 730 - - - 2,947
 
2% Real Growth In Personnel Costs
Allocated - - - 238 380 400 422 445 465 535 - - - 2,884
Unallocated - - - - - 123 251 387 533 686 - - - 1,980
3 Total Allocation - - - 238 380 523 673 832 998 1,221 - - - 4,864
 
4 Baseline Adjustment - - - 117 134 142 148 154 160 161 - - - 1,016
Total (1+2+3+4) 510 859 985 1,692 2,253 2,785 3,541 4,224 5,263 5,978 255 308 220 28,873

Notes

  1. Figures may not add due to rounding.
  2. The figures shown in 2001-02, 2002-03, 2003-04 and 2004-05 represent actual expenditure, whereas the figures from 2005-06 onwards are planned.
  3. The $200m underspend in 2002-03 was reprogrammed to 2008-09.
  4. The $642m represents an increase in the slippage rate from 15 per cent to 20 per cent. The Government agreed in the 2003-04 Budget to reprogram these funds to 2008-09 - 2011-12.
  5. The $500m underspend in the Approved Major Capital Equipment Program in 2003-04 was reprogrammed to 2008-09 - 2011-12.
  6. The $884m reduction reflects changes to the Defence Capability Plan and revisions to the rate of capital expenditure in the period 2004-08. These funds were reprogrammed to the period 2009-10 to 2013-14.
  7. This represents the bringing forward of $170m associated with the decision to proceed with the acquisition of a further two airborne early warning and control aircraft.
  8. This represents the bringing forward of $300m in the 2005-06 Budget to take advantage of the Defence Materiel Organisation's improved project performance
  9. This represents a reprogramming of the original allocations to reflect the revised timetable for entry of equipment into service.

cont/...

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