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Wednesday, 7 September 1983
Page: 481


Mr DAWKINS (Minister for Finance) —For the information of the Parliament I present a document entitled 'Program Presentation of Appropriations and Outlays-Departmental Estimates 1983-84'. In doing so, I seek leave to make a statement regarding the progress of the Government's budgetary reform measures.

Leave granted.


Mr DAWKINS —This document presents appropriation and outlay information for each department in a program format. The information, especially the detailed tables on individual programs, is intended to assist Parliament in its examination of the 1983-84 Budget. It is also intended to aid the general public in reaching a better understanding of Government activities. The document provides a cross- reference to data in the Budget Papers and contains an explanation of budgetary concepts, including the relationship between appropriations, expenditure from the Consolidated Revenue Fund, and outlays. This program presentation has been prepared to replace the document which was entitled 'Functional Classification of Outlays-Departmental Estimates', which had been published after the Budget each year since 1980. A review of that document suggested that it was capable of improvement, both in terms of the degree of detail on government activities provided and in the form in which it presented information. That review took account of the views of the Government and the recommendations of parliamentary committees and, in particular, of the report of the House of Representatives Standing Committee on Expenditure entitled 'Parliament and Public Expenditure'.

The presentation of program information which has been adopted for 1983-84 should be regarded as illustrative and exploratory. The program structures which have been adopted have been developed within my Department, partly on the basis of the ready availability of information. Accordingly, the presentation will be subject to substantial further development and refinement on the basis of this year's experience, with a view to improved presentation of this information in future years. The presentation of Budget information in the form of this document is but one element of the budgetary processes which needs to be reformed.

The Government has already introduced major improvements in the Budget systems. Convening the National Economic Summit Conference, establishing the Economic Planning Advisory Council and publishing forward estimates of outlays and receipts are examples of these reforms. These measures demonstrate the genuineness of the Government's wish to inform the Parliament and the people about Budget issues and to provide them with information such as will permit real debate and the achievement of consensus about economic policy. Also in keeping with the Government's desire to inform the public more fully about budgetary and economic matters, the monthly statement of Commonwealth Government financial transactions is now accompanied by considerably more explanatory material than had been the practice under the previous Government. Closed door discussions on matters which affect society should be avoided wherever possible; such an approach is unnecessary, outdated and is inimical to good decision making.

In developing the 1983-84 Budget, the Government also gave close consideration to tax expenditures and their relation to formally defined outlays. In the economic statement of May and in the appendix to Statement 3 in the Budget Papers, the Government published its tax expenditures decisions as they related to programs or functional outlays. Tax expenditures have not been well considered in past budgetary processes and the Government has shown that it wishes to give such concessions consideration equal to that given to outlays. In the countries which I visited recently to discuss budgetary matters, I saw that all governments were grappling with means to better control outlays. Certainly the effort which we exerted in developing the 1983-84 Budget is mirrored overseas, however not always with similarly worthwhile results. In Australia, where recent economic performance has been the poorest for over 35 years, it is especially important that we give strict attention to the efficiency and effectiveness of tax expenditure and outlay programs. Accordingly, the Government has announced that its examination of programs will be a continuing exercise.

As I noted before, the presentation of Budget information which led to the development of this new document is but one element of Australia's budgetary processes which require examination. We can learn from overseas governments, especially concerning techniques for reviewing programs. We would like to encourage even further debate on Budget options and priorities before the Budget is finalised. We need to encourage an appreciation in the Public Service that public servants are resource managers as well as policy managers. We have to integrate human resource budgeting into the Budget process. To this end we have this year adopted new measures to ensure better control of resources. Following the introduction of the Budget, proposals for new staffing are now to be considered by the Minister for Finance upon the advice of his Department and the Public Service Board. Consequently, we have introduced a new division in the Budget, division 312, entitled 'Special Funds for Expenditure in Relation to Government Programs at the Direction of the Minister for Finance'. In past Budgets some limited allowance has been made in the salaries and administrative expenses appropriations of individual agencies for staffing effects of new policy proposals. The staffing effects of such proposals were in some instances taken up in a post-Budget review of staff ceilings and the funds allocated as required from the Advance to the Minister for Finance. For this Budget an estimate has been made of the likely staffing effects of new policy proposals and separate provision is sought under division 312.

Another major reform involves the presentation of financial impact statements. In future all second reading speeches of Ministers will include a statement of the financial impact of the legislation. These statements will include estimates of any significant costs, revenue and savings arising directly from that legislation where such estimates can be calculated readily and reliably. Where that information is not available, Ministers will include a brief explanation of the circumstances in their second reading speeches and outline in broad terms the expected financial impact of the legislation. Ministers will also attempt to assess the impact on industry and other sections of the community when formulating legislation. While such effects are often indirect and not easily quantifiable, Ministers will endeavour to include this information wherever possible.

The Government is taking this action because it believes the community has a right to know the financial and economic effect of government policies and programs. This reform will give tangible effect to this belief. These reforms are only the first step. Consistent with the policies announced in the document 'Labor and Quality of Government', we are actively pursuing other reforms of the budgetary processes.

While these other tasks are still in process, the proposals which are generated will be of interest to all in the Parliament as well as in particular to several of the parliamentary committees which will be consulted on the examination of program budgeting, the role of program statements and on other matters which affect the Parliament's methods of consideration of the Budget. The Government will also examine the possibility of publication of further pre-budgetary and post-budgetary information which would be of interest to Parliament and the community as a whole. These measures are but the start of our efforts. As work on further measures is completed, I shall inform the House of our decisions. I thank the House.