Australian Government Budget - Overview
The Budget provides a complete picture of Australia's planned financial performance, setting out the framework for the conduct of the Government's fiscal policy for the financial year.
The process begins in November with two events. The first is a process of updating estimates in the Accrual Information Management System (AIMS) to provide an uptodate baseline. The second is a Senior Ministers' Review, which is a meeting between the Prime Minister, the Treasurer and the Minister for Finance and Administration to establish policy priorities and strategy for the next financial year. On the basis of this review, portfolios prepare their Budget Submissions for Cabinet, including all proposed Budget policy variations for the agencies in the portfolio. The Submissions detail new funding being requested for proposals and areas where savings can be made within an agency's area of responsibility. The Submissions are required to be provided to Finance for agreement of the costings. They are then circulated for coordination comments and lodged with the Cabinet Office, generally by late February.
The Expenditure Review Committee (ERC) considers all Submissions in March. ERC is a committee of Cabinet and makes decisions about which proposals will receive funding and at what level the funding will be provided. After the conclusion of ERC, the Ad Hoc Revenue Committee meets to make decisions about the revenue aspects of the Budget. Once all decisions have been finalised, a pre-Budget review of the estimates is conducted to ensure that all decisions are reflected in AIMS.
Preparation of the Budget documentation starts after the ERC process is completed. Agencies prepare two components – the Portfolio Budget Statements, which provides additional details and explanations of the Budget and the Statement of Risks, which is included in Budget Paper No 1 and the Mid-Year Economic and Fiscal Outlook statement. All Budget papers, including the Portfolio Budget Statements, are tabled in the Parliament on Budget night, in May.
Once the Budget is tabled in Parliament, the Appropriation Bills 1 & 2, along with the other documentation are scrutinised by the relevant Senate Legislative Committees. This is usually concluded in time for Parliament to pass the Appropriation Bills before the end of the financial year.
Approximately six months after the Budget, the Government produces a Mid-Year Economic and Fiscal Outlook (MYEFO). This compares estimates to actual expenditure and provides an update on the budgetary position. At around the same time, the Additional Estimates process is undertaken, which enables portfolios to reassess funding requirements and if necessary submit requests for additional funding. The Additional Estimates are incorporated into Appropriation Bills 3 & 4. The Senate Legislative Committees also scrutinise Appropriation Bills 3 & 4 once they have been tabled in the Parliament.
The final stage in the Budget process occurs three months after the end of the financial year when the Final Budget Outcome documents are tabled in the Parliament. This is required under the Charter of Budget Honesty Act 1998 and provides information on the Government's fiscal outcomes for the financial year.
Last Updated 8 March 2005