CHAPTER 1
- INTRODUCTION
Reference
On 21 November 1996, the Senate agreed to an amendment from Senator Colston,
then Chairman of Committees, on behalf of all legislation committee chairs,
to a motion from Senator Campbell that the Appropriation Bills be read
a second time.[1] Amongst other things, this amendment
gave effect to the recommendation in the 1996-97 estimates report of the
Environment, Recreation, Communications and the Arts (ERCA) Legislation
Committee, 'that the matter of Portfolio Budget Statements be referred
to the Finance and Public Administration Legislation Committee for consideration
of a new, improved format'. [2]
In its examination of the 1996-97 budget estimates of the two portfolios
within its purview, namely Communications and the Arts and Environment,
Recreation and Territories, the ERCA Committee encountered a number of
problems about which it commented in its report to the Senate. In the
case of the Communications and the Arts portfolio, the committee had difficulty
with the fact that the then portfolio program structure failed to differentiate
clearly 'communications' matters and 'arts' matters; it also commented
that the Portfolio Budget Statements (PBS) lacked a summary of budget
measures by sub-program. In the case of the Environment, Recreation and
Territories portfolio, the table of significant variations was not broken
down by budget measures, meaning that there was no previous level of expenditure
against which to compare the 1996-97 amount of variation.[3]
Implicit in the committee's criticisms was the fact that the two PBS,
prepared under the same guidelines issued by the Department of Finance,
were apparently different in material respects.
Senator Colston's amendment also noted that 'most legislation committees
commented adversely on the current content of the Portfolio Budget Statements,
including a lack of information' and included a recommendation from the
Foreign Affairs, Defence and Trade Legislation Committee 'that the Department
of Finance revise the structure of the Portfolio Budget Statements to
include information about estimates expenditure for items within sub-programs'.[4] In its inquiry, the committee has taken
into consideration all comments by individual senators in the Hansard
transcripts of evidence of budget estimates hearings for the years
1996-97 and 1997-98 as well as the collective comments of the legislation
committees for the same years.
Criticism of both the format and the content of the PBS and their predecessors
is not unusual and should perhaps be regarded as part of a natural process
of refinement of the documentation. That it reached the level it did in
October 1996 is perhaps attributable to two factors: the large number
of new senators following the March 1996 election; and the number of former
ministers and other experienced senators who were for the first time coming
to grips with the documentation in opposition.
Nor is the referral of such criticisms to this committee unusual, having
occurred most recently in 1989 following a recommendation from the then
Estimates Committee E. In its April 1991 report, Estimates Committee
Documentation and Procedures, the committee concentrated primarily
on the conduct of the estimates process rather than the content of the
estimates documentation per se.
Conduct of the inquiry
The committee commenced its inquiry by seeking the views of the Department
of Finance (DoF), in its capacity as custodian of the guidelines for the
compilation of the PBS. Officers from the department, at their request,
provided a private briefing to the committee and other interested senators
on 24 February 1997. As a result of some of the concerns raised by senators
at that briefing, the DoF draft Guidelines to the preparation of the
1997-98 Portfolio Budget Statements were amended to encourage reporting
'at an appropriate level' (that is, sub-program or component level as
required) 'having regard to materiality, parliamentary and public interest'.[5]
The document went on to state 'You may need to use different levels of
reporting for different programs, the key judgment being the need to ensure
that sufficient information is provided on the Budget appropriations'
and suggested that portfolio coordinators contact their legislation committee
secretary if in doubt about the appropriate level of reporting and to
determine whether the committee required particular information to be
provided.[6] The committee has ascertained that only a few did
so.
At the committee's request, DoF followed the briefing with a formal written
submission dated 10 April 1997. The committee circulated the DoF submission
to all portfolio ministers, legislation committee chairs and other senators
as individuals, seeking views both on the matters raised in the submission
and on the general issue of the structure, content and level of detail
of the PBS. Sixteen submissions were received in all, from fourteen departments,
agencies or portfolio ministers (see Appendix A). No legislation committee
chair responded; nor did any individual senator. At the committee's urging,
however, five of the other legislation committee chairs in their opening
remarks at the examination of the Budget estimates invited comment on
the PBS and many senators took the opportunity to place their views on
the public record in that forum.
On 20 June 1997, the committee held a round-table public hearing on the
format of the PBS, to which representatives of each portfolio were invited.
Keynote speakers included Senator Sue Knowles, presenting the perspective
of a legislation committee chair; Senator Mark Bishop, who spoke as a
relatively new opposition senator; Cleaver Elliott, Clerk-Assistant (Committees)
who presented the views of the manager and supervisor of the estimates
committee process; and various representatives from the Department of
Finance who spoke on the current structure and intentions of the PBS and
on the proposed changes which will come about as a consequence of the
move to accrual budgeting. The discussion which ensued among the participants
helped the committee understand the perspectives of the creators of the
PBS.
The committee hopes that other participants shared the views of Robert
Newton, representing the Department of Foreign Affairs and Trade, who
stated:
what a very useful and constructive initiative this meeting is. It is
one thing to have the guidelines on how to prepare the PBS from the Department
of Finance, which are useful and extremely important, but it is another
thing to be able to come here today and to listen to members of the committee
who are, in effect, our clients. For those of us charged with preparing
these documents, it is a very valuable experience.[7]
In undertaking this inquiry, the committee has not undertaken a serious
study of the Portfolio Additional Estimates Statements. It believes, however,
that its general comments are equally applicable to those documents. Nor
has the committee considered the conduct of the supplementary estimates
hearings, in which the documentation plays only a minor role.
Acknowledgments
The committee would like to thank all the participants in its round-table
public hearing and particularly those who followed up their appearance
before the committee with submissions which further elucidated their views
on aspects of the committee's inquiry.
As always in its reviews of budget documentation, the committee is indebted
to the Department of Finance officers who have patiently and conscientiously
worked with the committee and its secretariat, clarifying points of detail.
Any misunderstandings which remain are the committee's alone.
[Return to Table of Contents]
Footnotes:
[1] Journals of the Senate,
21 November 1996, no. 57, p. 1067.
[2] Environment, Recreation, Communications
and the Arts Legislation Committee, Report on Examination of Estimates,
October 1996, para 2.16.
[3] ibid, para 2.15.
[4] Journals of the Senate,
21 November 1996, no. 57, p. 1067.
[5] Department of Finance, Guidelines
to the Preparation of the 1997-97 Portfolio Budget Statements, p.3.
[6] ibid, p. 6.
[7] Senate Finance and Public Administration
Legislation Committee, Hansard, 20 June 1997, p. F&PA 15.
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