Operation Sunlight
Richard Webb
The Budget papers for 2009–10 contain changes to the
presentation of information. The changes were foreshadowed in Operation
Sunlight. According to the Department of Finance and Deregulation website:
Operation Sunlight is the Government’s reform agenda to
improve the openness and transparency of public sector budgetary and financial
management and to promote good governance practices.[1]
Perhaps the most praiseworthy change is the presentation of
information at the program level in Portfolio
Budget Statements.[2] In the past, some agencies provided information at the program level but others
did not. Now, not only is information provided at the program level but the
Portfolio Budget Statements include the three forward estimates years at the
program level. This is in addition to information for the previous and current
budgets as has been provided in the past. For years, Members of Parliament have
sought information at the program level and program funding over the forward
estimates years. One wonders why this information was not provided before since
the information obviously existed.
A second change is the revision of outcomes. A criticism of
some outcomes is that they were too vague. On the one hand, this allowed
flexibility as to where funds could be allocated. On the other hand, this
limited parliamentary scrutiny of spending. The Department of Finance and
Deregulation, in conjunction with agencies, has reviewed all outcomes. Readers
will judge how successful this exercise has been. One problem that arises when
outcomes are revised is that it might be difficult to obtain comparable data
for earlier years.
A third change is that Budget Paper no. 4 includes a
detailed table listing all special accounts authorised under the Financial
and Management Accountability Act 1997. The table shows, by portfolio and
entity, estimated balances and flows for the budget year and for the previous
year. Again, this is a worthwhile addition.
The presentation of income statements in 2009–10 has changed
to show the ‘net cost of services’. The net cost of services is derived by
deducting from an agency’s expenses its ‘own source income’. This is income in
the forms of revenue from the sale of goods and services, profits from the sale
of assets etc. The money appropriated by government is then deducted from the
net cost of services to derive the agency’s surplus or deficit, as the case may
be.
The rationale for the change is that the net cost of services:
… recognises the nature of public sector activity and the
emphasis on the net cost of services to Government.[3]
It is true that the presentation of accounting data as used
by the private sector, especially the concept of profit and loss, is not very
meaningful for government agencies that are funded mainly by government
appropriations. The net cost of services recognises this by highlighting the
contribution that agencies can make from their own resources to funding their
activities on the one hand, and the contribution from government on the other
hand.
It is questionable whether the adoption of net cost of
services really adds much. While some readers of budget papers may be interested
to know the net cost of services, it is probably of little interest to most readers.
Many readers, especially those with no accounting knowledge, would not have any
familiarity with the concept. Finally, the revised presentation is complicated
compared with the straightforward presentation of past years.
[1]. Australian Government,
‘Operation Sunlight’, Department of Finance and Deregulation website, viewed 18
May 2009, http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/operation-sunlight/index.html
[2]. Australian Government,
‘Portfolio budget statements’, Budget 2009–10 website, viewed 18 May 2009, http://www.budget.gov.au/2009-10/content/pbs/html/index.htm
[3]. Australian Government, Operation
Sunlight: enhancing budget transparency, Australian Government, December
2008, p. 18, viewed 18 May 2009, http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/operation-sunlight/docs/operation-sunlight-enhancing-budget-transparency.rtf
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