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Budgeting in Australia: Peer Review

Explore Australia's outstanding budget situation with surpluses and prudent reforms. Discuss fiscal rules, accrual budgeting, outcomes, HR management, and reducing red tape.

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Budgeting in Australia: Peer Review

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  1. Budgeting in Australia:Peer Review 29th Annual SBO Meeting 2-3 June 2008 Gerhard Steger

  2. General remarks • Australia has a bright budget situation: • Budget surplus for nine of past ten years • As of 2006, no net debt • Australia is on the asset side of budget life • Result of long lasting sound fiscal policy and budget reforms • Budget surpluses being transferred to funds for covering future liabilities • New funds: disbursement of earnings AND capital – difference to budget expenditure ?

  3. Issues for discussion Some questions remain: • Fiscal rules: principles versus targets • Accrual budgeting • Outcomes and outputs • Role of department of finance • Human resources management • Reducing red tape within government

  4. Fiscal rules: principles versus targets • Fiscal rules based on principles, not on targets • Expenditure in Australia has grown rapidly during the last years • Might there be a need for combining both: principles AND targets to assist each other ?

  5. Accrual budgeting • Introduced 1999/2000 • Decision – making almost exclusively on cash • Budget is enacted on accruals • Both aspects nearly disconnected • More pragmatic attitude towards detailed application of accruals (less orthodox focus to concentrate on the real advantage of accruals) ? • How to get stakeholders on board in favor of pragmatic accruals ?

  6. 0utcomes and Output • Catalyst to increase focus on results • Make outcomes more relevant (concrete, measurable) in order to use them really for decision making • Use performance information to steer budget and administration • How to get politicians (ministers and members of parliament) to use performance information as an important tool ?

  7. Role of department of finance • „Traumatic period“ a decade ago • Lesson for other countries: MoF should have the grip on line ministries to a reasonable extent • Otherwise MoF lacks necessary information and influence to effectively exert its „shadow function“ • How to combine merits of „traditional“ functions with a reform-minded attitude of MoF ? • Let line ministries act freely as long as they stick to their obligations but watch them closely to intervene asap if necessary

  8. Human resources management • Each agency makes its own arrangements • Lack of public service-wide collective agreements • Danger of increased human resources- costs as agencies compete for staff ? • Combination of collective agreements with performance based bonuses ?

  9. Reducing Red Tape within Government • Very important issue to promote efficiency and effectiveness However: • How to prevent the rise of a new anti-bureaucracy bureaucracy? • Combine reducing red tape with budget restraints for all ministries to push them towards reduction of bureaucracy?

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