CHAPTER 1 – THE INQUIRY PROCESS
Reference
On 21 November 1996, the Senate referred to the Finance and Public Administration
Legislation Committee `the matter of the Portfolio Budget Statements ...
for consideration of a new, improved format'. [1]
The reference arose from the unusually high level of criticism about the
format and content of the Portfolio Budget Statements (PBS) from legislation
committees following their consideration of the 1996-97 budget estimates.
Conduct of the initial inquiry
The committee sought submissions from all portfolio ministers, legislation
committee chairs and individual senators, receiving 16 in all. It sought
public feedback from senators in the course of all subsequent estimates
hearings, with several senators taking the opportunity of expressing their
views on the PBS in those fora. In addition, it held a round-table public
hearing on 20 June 1997 to which representatives of all portfolios were
invited. On the basis of the information gleaned from those sources, it
tabled an initial response to the reference on 30 October 1997 in a report
entitled The Format of the Portfolio Budget Statements.
First report
In its first report on the reference, the committee noted the changes
to the PBS guidelines which were intended to alleviate problems encountered
in the PBS 1996-97: the inclusion of cross-portfolio information; changes
to nomenclature; simplification and reduction in the number of tables;
aggregation of minor variations to outlays; and the highlighting of new
budget measures. It presented broad general principles for the PBS but
did not recommend further changes to the documents at that time, in light
of the considerable change expected through the move to an accrual budget
for the year 1999-2000 and an outcomes and outputs reporting framework.
The committee did, however, seek to maintain its involvement in the process
of determining the format of the PBS in the accrual budgeting era and
signalled its intention to report again on the PBS following the 1999-2000
Budget estimates round.
Conduct of the second phase of the inquiry
As the proposed guidelines for the 1999-2000 PBS evolved, input from
the committee was regularly sought by the Department of Finance and Administration
(DOFA). DOFA also conducted an accrual budgeting briefing session for
committee members and other interested senators on 7 December 1998 and
provided a pre-hearing briefing before the 1999-2000 estimates round,
to help familiarise committee members and their staff with the changed
PBS format. Similar pre-hearing briefings were provided by most portfolios,
for legislation committee members. The committee conducted the second
phase of the inquiry in much the same way as the first. It wrote to portfolio
ministers, seeking the views of their departments and agencies either
jointly or independently on the requirements for the PBS 1999-2000 and
on the adequacy of the resultant products for use by senators in the 1999-2000
budget estimates round. Sixteen submissions were received and are listed
in Appendix A. [2] Senators attending estimates
hearings were again invited to comment, in the hearings, on the PBS and,
as the committee recommended in 1997, all legislation committees reported
on the adequacy of the PBS format and contents in their budget 1999-2000
estimates reports. On 17 June 1999 the committee held another round-table
public hearing to which representatives of all portfolios and other PBS
stakeholders were invited to present their views and to discuss major
issues associated with the PBS guidelines. A list of attenders is included
as Appendix B.
From those sources of information, the committee has attempted in this
report to draw together views on the PBS and, inter alia, on the
suitability of the PBS for the estimates process. Those views are not
unanimous. Nor are they necessarily voiced from a position of understanding
of the constraints under which the PBS are compiled. The committee has
attempted to frame conclusions and recommendations which may have the
support of the majority of its colleagues, in the certain knowledge that
it will not please all of them.
Acknowledgments
The committee would like to thank all the participants in its round-table
public hearing and all submittors. Without their cooperation, the committee's
understanding of the PBS from the point of view of the creators of the
documents would be much the poorer. Apart from Finance, six current departments
and previous incarnations thereof deserve particular thanks for supporting
the committee in its 1990-91, 1996-97 and current inquiries into the format
of the PBSs and their predecessors through both submissions and witnesses:
they are Defence; Education, Training and Youth Affairs; Environment and
Heritage; Family and Community Services; and Immigration and Multicultural
Affairs.
As always in its reviews of budget documentation, the committee is indebted
to officers of DOFA, who, apart from their courteous assistance to the
committee in its inquiry, have worked tirelessly to bring about a successful
introduction of accrual budgeting in an outcomes/outputs reporting framework
and to juggle the competing demands of accounting standards, transparency
in public accounts and meaningful accountability to Parliament in an administratively
devolved environment.
Footnotes
[1] Journals of the Senate, 21 November
1996, p. 1067.
[2] A volume of submissions will be tabled with
this report. Copies are available from the committee secretariat.
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