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Public Administration News  
Australia Lays Groundwork for Sweeping Financial Reforms
Source: http://www.futuregov.asia
Source Date: Friday, November 01, 2013
Focus: Electronic and Mobile Government, ICT for MDGs, Knowledge Management in Government, Citizen Engagement, Institution and HR Management, Internet Governance
Country: Australia
Created: Nov 05, 2013

With a clean slate driving the business of government, Australian Prime Minister Mr Tony Abbott and Treasurer Mr Joe Hockey are laying the groundwork for major financial management reforms.

These initiatives underscore moves to reduce waste and duplication, while ensuring taxpayers “receive value-for-money from each dollar spent.”

Among the developments, a new financial management law, the Public Governance, Performance and Accountability Act 2013 becomes operational from 1 July 2014.

This law affects policy, budgeting, and service-delivery decisions across more than 100 core Commonwealth departments and agencies. It replaces the Financial Management and Accountability Act (1997) and the Commonwealth Authorities and Companies Act (1997).

Governance and accountability

New legislation, and policy changes seek to encourage “fit-for-purpose governance arrangements.” Future changes are being canvassed as supporting a uniform, consistent, and accountable Commonwealth framework. Twenty years ago, a similar reform occurred under then Prime Minister, Mr John Howard, when the Commonwealth came under scrutiny under a Coalition government.

The latest reforms package is built around “explicit requirements” that improve financial assessment and reporting. New directives aim to improve risk management, while building co-operation and partnering across all levels of government.

Resetting accountability framework

Among recent high-profile initiatives, Prime Minister Abbott’s administration has established a Commission of Audit. This commission, led by private-public sector stakeholders, plans to reset the Commonwealth’s accountability framework.

This commission is taking a fresh look at how the Commonwealth is run. Findings, to be delivered in the New Year, have implications for funding, staffing, and service delivery arrangements.

Current terms of reference explore how budgets are managed, while offering a reinvigorated blueprint that supports an accountable, sustainable, and financially-savvy government.

Where to next?

New policy formulation is complemented by more than two years of work, already done by the peak Department of Finance. Under the auspices of its secretary, Mr David Tune, this department is refining its Public Management Reform Agenda.

A dedicated website offers some insights into this policy and consultation work, noting that “a comprehensive reform process” improves the quality of financial and performance management across the public sector.

Fired on all fronts

Prime Minister Abbott’s policy agenda is complemented by new legislation, and a Commission of Audit, among other behind-the-scenes consultation and advice. These policies target improved public sector performance and renewed accountability.

With an annual budget that tops AU$398 billion in Commonwealth spending, improvements to financial management help “do-more-with-less,” while ensuring that social services remain the joint responsibility of Commonwealth, State, and Territory governments.

Moves are under-way to streamline Federal-State budgeting arrangements. An independent scrutiny of the public sector sets new performance benchmarks and targets. The effectiveness of “performance metrics” is being examined, together with timelines seeking transparent and accountable government.

The Commission of Audit review is being submitted in two stages: phase one to be completed during January 2014; the next phase is being finalised no later than March 2014.

This review examines ways to slash wasteful spending, while identifying areas of unnecessary duplication between the Commonwealth and other levels of government.

Auditors are identifying programmes where Commonwealth involvement is inappropriate, no longer needed, or blurs lines of accountability.

Living within means

A broader Commonwealth agenda mandates that “government should live within its means.” The current splitting of roles and responsibilities between the Commonwealth, as well as State and Territory governments is under scrutiny.

Core Commonwealth departments and agencies impacted by financial management reforms include the Australian Taxation Office, The Treasury, the Department of Communications, and the Department of Human Services.

In other news, the finance and ICT heads of key Commonwealth and State departments are sharing insights about governance and accountability at a by-invitation-only 3rd Regional GovCFO Forum Australia being held Monday 2 December at the Canberra Convention Centre.

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