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Presented by Pat McMahon Budget Advisor, Australian Department of Finance and Deregulation
More useful to Cabinet for strategic allocation decisions More accuracy in the estimates and more reliable fiscal settings More certainty for line ministries to plan Less work in building budgets (no more zero budgeting) A "True" MTEF
Feature 2. Forward Estimates are linked to the Budget (no zero based budgeting each year)
Reconciliation of 2007 -08 Budget, 2007 -08 MYEFO, 2007 PEFO and 2008-09 Budget underlying cash balance estimates
a. b.
Excludes the public debt net interest effect of policy measures. Excludes expected Future Fund earnings.
T O A C H I E V E
N E W 4 Y E A R BUDGE T
4 5 yrs
MTEF Revised YEARs APPROPRIATION 5 Years ONE New State Budget Plan
Continuing Policy In Budget year over 5 years New Policy over 5 New Policy in Budget year years Total over 5 years Total Appropriation
Expense ($m)
Department of Education, Employment and Workplace Relations Department of Immigration and Citizenship Department of Families, Housing, Community Services and Indigenous Affairs Department of the Treasury Department of Health and Ageing Medicare Australia Total Related revenue ($m) Australian Taxation Office Australian Customs Service Total
SOURCE: BUDGET PAPER NO.2 2008-09
2007-08
2008-09
2009-10
2010-11
2011-12
3.9 3.8
4.3 2.8
4.2 0.6
4.3 0.1
1.0 .. 1.0
1.1 .. 1.1
1.2 .. 1.2
1.3 .. 1.3
Examples that highlight some program specific parameters (from 2008-09 Budget Papers)
a $207 million increase in estimated expenses for Medicare Services reflecting increases in demand for a range of medical services including services provided by general practitioners, pathology services and diagnostic imaging services and a $240 million increase in estimated expenses for interest rate subsidies available under Exceptional Circumstances assistance, primarily due to a higher than expected take-up by eligible farmers.
Building Block C. Aligning MTEF & PBB and setting a framework for operating cost flexibility
FUEL SUBSIDY
Inputs
Processes / activities
Outputs/ programs
Outcomes
Salaries Program Management Good and Services Program Management s Property Expenses Program Management Office Expenditure Program Management Administered costs (nonrunning costs) Subsidy Payment by set Subsidy Government
Building Block E. A central budgeting system to control variations to the forward estimates
The authoritative record of estimates is the central budgeting system managed by the Department of Finance. Changes cannot be made without authority i.e.
Government decisions; Economic parameters; Program specific parameters; and Other (rarely used, but could include changes due to accounting standards etc)
T O A C H I E V E
National Vision
5 yrs
P R E S I D E N T S VISION
MTEF Revised
Continuing P olicy over 5 years
Hypothetical example of continuing and new policy Family Planning Five year National Plan
The National Plan states an aspirational target for Family Planning Services to cover 25 million families. Existing 4 year Budget Plan Previous decisions allocated funds to cover only 10 million families. Fiscal space allows for new spending on priorities not yet implemented Government calls for new policy submissions within limits available. New Policy in the Budget Government allocates funds for an additional 5 million families. The new forward estimates provide funding for 15 million families. Appropriation for Family Planning assistance to 15 million families.
Planning Target MTEF - Existing Policy New Policy (Addition) 2009 25,000,000 10,000,000 0 2010
NUMBER OF FAMILIES 2011 25,000,000 10,000,000 5,000,000 2012 25,000,000 10,000,000 5,000,000 2013 25,000,000 10,000,000 5,000,000 25,000,000 10,000,000 5,000,000
MTEF
N ber of F m um a ilies 20,000,000 15,000,000 10,000,000 5,000,000 0 2009 2010 2011 2012 Revised MTEF 2013 MTEF - Ex istingPolicy