FOI 24 25 054 IR Document 2.pdf

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FOI 24-25/054 (IR) - Document 2
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Provisions for policy purposes
•
The estimates for published measures that cannot be allocated to relevant agencies are
included in the Contingency Reserve – for example, where legislation is required or an
agreement with the states and territories need to be finalised before the measure is
implemented.
•
The Government has also provided ongoing funding for some measures where there is still a
business case that needs to be undertaken or further policy work is required.
•
The Government has also provisioned funding in the Contingency Reserve for measures with
financial implications that are not for publication (nfp) due to commercial sensitivities.
•
The Contingency Reserve includes a provision for the estimated financial impact of further wage
increases resulting from the decision of the Fair Work Commission’s Aged Care Work Value Case
— Stage 3, with the operative date and phasing in of wage increases still to be determined. The
Government has also made a provision to deliver on its commitment to provide funding
towards a wage increase for Early Childhood Education and Care workers, with details to be
finalised following Fair Work Commission processes (page 225, 2024‐25 Budget Paper No.1).
•
The Contingency Reserve also includes a provision to reflect the outcomes of the December
2023 National Cabinet meeting and to meet future anticipated disaster recovery costs (page
225, 2024‐25 Budget Paper No.1).
•
A number of measures in the 2024‐25 Budget Paper No.2 reference new funding that is
provisioned in the Contingency Reserve. A full list of these measures is provided in
Attachment C.
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Released by the Department of Finance
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FOI 24-25/054 (IR) - Document 2
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•
The drawdown of the Conservative Bias Allowance decreased expenses by $1.6 billion in
2024–25, $1.5 billion in 2025–26, $3.2 billion in 2026–27 and $3.1 billion in 2027–28.
–
This is consistent with the long‐standing practice and does not represent a saving or offset
to spending measures.
Underspend Provision
•
The underspend provision has been included in the Contingency Reserve since at least 2000‐01.
An underspend provision is included in the 2024‐25 Budget.
–
The underspend provision is included in the estimates in the Budget year (2023‐24) to
compensate for the historical tendency of entities to overestimate their expenses in the
current financial year.
–
The value of the underspend provision would not be publicly disclosed (as is standard
practice).
Key points
•
The Contingency Reserve is an allowance that reflects anticipated events that cannot be
assigned to individual programs in the preparation of the budget estimates and is used to
ensure that the estimates are based on the best information available at the time of the Budget
or MYEFO update.
•
Consistent with past budget rounds, a key component of the Contingency Reserve is the
Conservative Bias Allowance.
•
Decision Taken But Not Yet Announced (DTBNYA) and Not for Publication (NFP) decisions are
also included in the Contingency Reserve.
•
In the 2024‐25 Budget the Government also included in the Contingency Reserve ongoing
funding for some measures where funding certainty is important but where further policy work
or a further business case is required. This approach ensures that the budget estimates properly
reflect the ongoing costs of these measures.
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FOI 24-25/054 (IR) - Document 2
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Background
•
Historical estimates for Payment and Receipts DTBNYA and NFP are provided in Attachment B.
•
This Issues Brief has been prepared with figures from the 2024‐25 Budget and does not contain
information which is not for disclosure – for example, it does not include individual DTBNYAs
which should not be disclosed.
Contact (SES)
Romesh Guneratne
Department of Finance
s22
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