Can a budget create an election war chest?

Budget Review 2015–16 Index

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]

Graph 1: Impact of ‘decisions taken but not yet announced’ over forward estimates period, Budget 2004–05 to Budget 2015–16 ($ million)

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]

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)

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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