Kai Swoboda
Decisions taken but not yet announced
One potential angle of budget analysis for ‘election
watchers’ is whether a government is building an election ‘war chest’ for a
possible election in the near term.[1] Such analysis can focus
on two line items in the summary tables of revenue and expenses measures in Budget
Paper No. 2 that provide amounts for ‘decisions taken but not yet announced’. These
funds may relate to specific policies that would be announced in the near
future. However, there may also be other considerations, such as commercial confidentiality
issues relating to procurement activities that lead to some measures being
included in these amounts rather than being separately identified.[2]
In the 2015–16 Budget, the impact on revenue of decisions
taken but not yet announced is $1,174.7 million and the impact on
expenditure of decisions taken but not yet announced is $1,139 million
over the four year forward estimates period (2015–16 to 2018–19).[3]
The net impact of these unannounced measures is therefore $35.7 million
for this period.
How does this compare to previous budgets and how useful is
it as an indication of a possible election in the near term?
Previous budgets and timing of federal elections
An examination of the revenue and expenditure impact of
decisions taken but not yet announced over the relevant four-year estimates
period for the previous eight budgets suggests that there is no clear
indication that the value of the measures included are related to the timing of
an election (Graph 1).
Graph 1: Impact of ‘decisions taken but not yet announced’
over forward estimates period,
Budget 2004–05 to Budget 2015–16 ($ million)[4]
Source: Australian Government, Budget measures: budget paper no. 2, 2015–16, pp. 5 and 54 (and previous years).
Note: For revenue measures, a
positive number indicates that revenue has increased. A negative number indicates
a decrease. For expense measures, a positive number indicates that expenses
have increased. A negative number indicates a decrease.
For example, the 2010–11 Budget (which preceded the federal
election on 21 August 2010) included significant measures that had a
negative impact on the budget compared to budgets preceding the 9 October
2004, 24 November 2007 and 7 September 2013 elections (2004–05, 2007–08
and 2013–14 Budgets respectively) which did not allocate significant funding to
this category. One common feature of election year budgets, but also part of
2005–06 and 2011–12 budgets, was that the net impact of decisions taken but not
yet announced was negative on the budget bottom line.
If anything, the analysis reveals that the size of the ‘decisions
taken but not yet announced’ measures has little relationship to election
years.
One general point from the analysis is that the value of the
‘decisions taken but not yet announced measures’ has increased in importance
since the 2010–11 Budget, with larger revenue and expenditure impacts in this
and later budgets compared to those up to the 2009–10 Budget.
That said, it is important to note that the size of the ‘decisions
taken but not yet announced’ relative to the size of overall budget measures in
each Budget is relatively small and almost insignificant (Graph 2).
Graph 2: Net impact of ‘decisions taken but not yet
announced’ and net impact of total budget measures over forward estimates
period, Budget 2004–05 to Budget 2015–16 ($ million)[5]
Source: Budget measures: budget paper no. 2, 2015–16, op. cit., pp. 5 and 54.
Indeed, even the budget measures are a relatively small proportion
of total revenues and expenses: the net impact of the 2015–16 Budget
measures in 2015–16 of $4.1 billion is less than 1% of the value of total expenses
of $435 billion in 2015–16.[6]
[1].
See for example reporting in relation to the 2013–14 Budget in C
Johnson, ‘Labor’s
secret poll stash’, Canberra Times, 19 May 2013, p.
1 and A Probyn, ‘Labor
takes troops to movies’, West Australian, 17 May 2013,
p. 21.
[2].
Senate Finance and Public Administration Legislation Committee, Official
Committee Hansard, 26 May 2010, pp. 12–13.
[3].
Australian Government, Budget
measures: budget paper no. 2, 2015–16, pp. 5 and 54.
[4].
Ibid. (and previous years).
[5].
Budget measures: budget paper no. 2, 2015–16, op. cit., pp. 5
and 54.
[6].
Ibid.; Australian Government, Budget
strategy and outlook, budget paper no. 1, 2015–16, p. 3–14.
All online articles accessed May 2015.
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