Federal Budget (Australia)
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The Federal Budget is a document that demonstrates the Australian Government's planned financial performance, and the framework it intends to conduct its operations in the following financial year.
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[edit] Process
The exercise of putting together the Budget begins in November when the Accrual Information Management System (AIMS) is updated with the latest estimates, and the Senior Minister's Review, where the Prime Minister, Federal Treasurer, and Minister for Finance and Administration, meets to establish the policy priorities and strategy for the coming financial year.
The outcome of the Senior Minister's Review determines how the different portfolios will prepare their Budget Submissions for Cabinet. Agencies within each portfolio will submit request for new funding, and potential savings within the agency. After Finance has agreed to the costings, the Submissions will be circulated for coordination comments and lodged with the Cabinet Office by late February.
The Expenditure Review Committee (ERC), a committee of Cabinet meets in March to consider all Submissions. They decide which proposals will be funded and the level of funding it will receive. At the end of the ERC, the Ad Hoc Revenue Committee will meet to make decisions on the revenue streams of the Budget. A pre-Budget review of the estimates will be conducted after all decisions have been finalised to ensure that they are reflected in AIMS.
Budget documentation will commence at the end of the ERC process. Agencies will prepare two components - the Portfolio Budget Statements and the Mid-Year Economic and Fiscal Outlook.
The Portfolio Budget Statements provide additional details and explanations of the Budget and the Statement of Risks, which is included in Budget Paper No. 1.
The final Budget will be presented and Tabled in Parliament by the Treasurer on Budget night.
The 2007-2008 Budget allowed for tax cuts, considerable spending and a surplus of several $billion (the estimated surplus has since grown considerably). Following this budget, there was an interest rate rise, with more expected. The Opposition Australian Labor Party supported the budget but said that it failed the 'future test' as it did not invest enough in the environment or in high speed broadband.
The Rudd government's 2008-2009 Budget (Labor's first budget in 13 years) contatined a $55 billion Working Families Support Package and a $21.7 billion fiscal surplus, which many expect to expand. It was widely applauded as a necessary, contractionary budget, getting the balance right between handeling the slowing global economy and slightly higher than comfortable domestic inflation. Tax cuts were introduced to increase the supply of labour, thus removing a structural inflationary pressure. The surplus, at 1.8% of GDP was greater as a percent. of GDP than all recent budgets. The figure was the highest ever. The government reduced spending; spending growth declined.
[edit] Charter of Budget Honesty Act
The Budget has to be presented within the framework that has been established by the Charter of Budget Honesty Act (1998).
The Charter provides for
- sound fiscal management of the Australian economy
- open dissemination about the status of public finances
- transparency in Australia's fiscal policy
[edit] Budget Night
The Commonwealth Treasurer will present the Budget on Budget Night, which is traditionally the second Tuesday in May. In modern times, the budget has always been broadcast live from Parliament House on the ABC and Sky News Australia. It is hosted on the ABC, without interruption from 7:30 pm to 8 pm, normally followed up with a report by a panel assessing the changes, benefits and flaws in the budget.
Before the presentation of the Budget, the day is spent behind locked doors briefing media and interest groups on various aspects of the budget. This is known as the Budget lock-up. Those invited to attend the briefings are not allowed access to the outside world until the Budget has been presented by the Federal Treasurer.
A convention in Australian politics is that the Leader of the Opposition delivers a "right of reply" speech in Parliament that is also broadcast on live TV.
[edit] 2008-09 Budget
The 2008-09 budget was released on May 13, 2008, with a particular emphasis on family welfare and building funds.[1] Shadow Treasurer Malcolm Turnbull claimed the increased taxation will contribute to inflation, but Federal Treasurer Wayne Swan argued that the tax will only affect high income-earners.[2] Criticisms have been made of the Budget's ambiguous timeline for developing clean coal technology, as well as for taking a cautionary approach to taxes that promote the creation of pollution. However, multinational developers[who?] have praised the $90 million Green Building Fund, which subsidies half the cost of fitting office blocks with environmentally friendly design features, and the new reform agenda demonstrates a conservative attitude towards stalled economic growth (as a result of the international credit and oil markets withdrawing existing capital inflow) in the coming decade in tackling the reform-resistant health care and vocational training sectors of the economy.[3][4]
[edit] References
- ^ "Australian Government, 2008-09 Commonwealth Budget". Australian Government. Retrieved on May 14, 2008.
- ^ "Turnbull accuses Swan of 'voodoo economics'", ABC News, ABC (2008-05-14). Retrieved on 2008-05-14.
- ^ "Budget didn't do enough on emissions: green groups", ABC News, ABC (2008-05-14). Retrieved on 2008-05-14.
- ^ Mitchell, Alan (2000-05-14). "It's clever, but is it just a trick", Australian Financial Review.
- "Australian Government Budget - Overview". Department of Finance and Administration. Retrieved on May 12, 2005.
- "Financial management and budget frameworks". Foundations of Governance. Retrieved on May 12, 2005.
