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Advising on expenditure

Finance delivered on its priorities of supporting the Government in its Budget preparation, providing policy and financial advice to the Minister for Finance, senior ministers and the Cabinet’s Expenditure Review Committee.

The Department’s stewardship role, driving collaboration and positive engagement across the Australian Public Service, was central to providing well considered and informed expenditure advice to government on a range of budget and financial issues.

Delivering an early Budget, Mid-Year Economic and Fiscal Outlook, Pre-Election Economic and Fiscal Outlook and Final Budget Outcome

In 2018–19 Finance undertook a range of work associated with the 2019–20 Budget, federal election and other peak events.

The Government delivered the 2019–20 Budget in April 2019—one month earlier than usual. To support the Government in its preparation for the Budget, Finance began planning and engaging with the Department of the Prime Minister and Cabinet (PM&C) and the Department of the Treasury (Treasury) in parallel with delivering the 2018–19 Mid-Year Economic and Fiscal Outlook (MYEFO). Finance’s strong collaboration with PM&C, Treasury and all Commonwealth entities meant that the 2019–20 Budget could be delivered within a compressed timeframe.

During the development of the 2019–20 Budget, Finance:

  • provided policy and financial advice on spending and savings proposals and lodged around 60 briefs for the Expenditure Review Committee of Cabinet to assist its policy deliberations
  • scrutinised cost estimates for spending and savings proposals. Finance:
    • considered more than 1,300 policy costings across all Commonwealth portfolios for accuracy and overall alignment with the policy’s intent
    • collaborated with portfolio entities to validate more than 4,000 estimate adjustments using the Central Budget Management System (CBMS)
  • coordinated key aspects of the Budget process and administered the Budget Process Operational Rules
  • prepared Budget documentation, including:
    • Statement 5 of Budget Paper No. 1, which details how the Government intends to allocate $500.9 billion of expenditure across the various functions of government for the 2019–20 year (totalling $2.1 trillion from 2019–20 to 2022–23)
    • Statement 8 of Budget Paper No. 1, which details fiscal risks, assets and liabilities, contingent assets and liabilities and government loans that may influence the actual Budget outcome
    • Statement 10 of Budget Paper No. 1, which provides the Australian Government financial statements
    • 252 new expense, capital and non-tax revenue measures included in Budget Paper No. 2
    • Budget Paper No. 4, which contains information on resourcing for government entities in 2019–20.

For the 2018–19 MYEFO, Finance analysed and processed 202 expense, capital and revenue measures and prepared a range of documentation, including information on the Australian Government financial statements and an update to fiscal risks and contingent liabilities and assets since the 2018–19 Budget.

In preparing for the 2019 federal election, Finance worked with the Treasury on the Pre-election Economic and Fiscal Outlook. In accordance with the Charter of Budget Honesty Act 1998, the Secretary to the Treasury and the Secretary of Finance publicly released the Pre-election Economic and Fiscal Outlook on 17 April 2019.

Over the caretaker period, up until the day of the 2019 federal election, Finance costed 66 election commitments. These costings were made available to the public on a dedicated website, electioncostings.gov.au.

For the 2017–18 Final Budget Outcome (FBO), Finance analysed and prepared a range of documentation, including information on the Australian Government’s financial statements and commentary in relation to payments, non-tax receipts, expenses, capital and non-tax revenue variances. The 2017–18 FBO was released on 25 September 2018 and was based on audit-cleared financial statements for all material in general government sector entities with the exception of the Department of Defence.

Delivering the Government’s fiscal and budget strategies

Finance supports the Government in a wide range of areas to enable the Government to achieve its fiscal and budget policy objectives.

In the context of the 2019–20 Budget, Finance provided policy and financial advice on major government projects, including measures to improve economic and community infrastructure (including ensuring corporate and financial regulators are resourced to operate effectively), improve skills and education outcomes and guarantee essential services. Finance provided policy and financial advice on major government investments into infrastructure and regional development, as well as to support drought and flood affected communities and to enhance national security.

Finance supported the Government in delivering on its Budget repair strategy by advising on the progress of Budget-related legislation through Parliament and the Government’s financial position.

Revised modelling to support estimates for the Pharmaceutical Benefits Scheme

In 2018–19 Finance worked collaboratively with the Department of Health on the redevelopment of the data models used for the Pharmaceutical Benefits Scheme. The new data models improve the accuracy of new policy costings and forecasting.

The Department’s Health branch (including a dedicated person on secondment from Treasury) developed a strong working relationship with the Department of Health. They worked collaboratively to obtain a better understanding of the drivers and components for the costing to support updates to the Budget estimates. This resulted in more accurate estimates for the 2019–20 Budget and more robust modelling for revenue, including the impact of the new arrangements for medicines with Special Pricing Arrangements.

We have also been able to establish better protocols to facilitate access for Finance to the Department of Health data for budget costings under the latest security and privacy requirements.