Expenditure Reviews and Reforms
Expenditure Review Taskforce
In 2008-09, the Expenditure Review Taskforce continued to assist the government to improve the efficiency and effectiveness of government programs and services. The taskforce worked with portfolio departments and central agencies to identify savings or opportunities to improve the overall quality of government program delivery. The taskforce continued to draw staff from both within the department and from the Australian Public Service more generally. The expenditure review process contributed to savings announced in the 2009-10 Budget totalling $3.2 billion over the forward estimates.
Formation of Budget Review Division
On 2 February 2009, Finance created a Budget Review Division, thereby strengthening the department’s capacity to provide policy advice, particularly in relation to medium and long-term policy issues. The division has a specific focus on policy reviews, economic analysis and long-term budget policy. It comprises the Long Term Budget Policy Branch, the Strategic Reviews Team, and the ongoing Expenditure Review Taskforce. Some additional funding for long-term budget modelling was provided to the department to support these functions as part of the Operation Sunlight initiative announced in the 2008-09 Additional Estimates.
Funding for the Inter-governmental Agreement on Federal Financial Relations
On 29 November 2008, the Council of Australian Governments (COAG) agreed to significant reforms to Australia’s federal financial relations through the Inter-governmental Agreement on Federal Financial Relations. Underpinning the reforms was a funding package that will provide an additional $15.2 billion over the period 2008-09 to 2012-13, primarily to support the states’ delivery of services across the sectors of healthcare, schools, skills and workforce development, disability services, and affordable housing. A key feature of the new framework is centralised payment arrangements, with payments centrally processed by the Commonwealth Treasury and paid directly to each state treasury. The transfer of responsibilities from Commonwealth portfolio agencies to the Treasury occurred prior to the 2009-10 Budget.
Finance contributed to this significant structural reform by providing policy advice and costing analyses to the government in relation to the COAG funding package. Finance also assisted the Treasury and other departments to establish the new framework and to restructure appropriation, estimates and payment arrangements.
Bradley-Cutler Inter-departmental Committee
Finance worked with DEEWR and the Department of Innovation, Industry, Science and Research to develop the government’s response to both the Review of Australian Higher Education (Bradley Review) and the Review of the National Innovation System (Cutler Review), through the Bradley-Cutler Inter-departmental Committee. The government announced its response to these reviews as part of the 2009-10 Budget. The response included funding to increase the number of Australians attaining a university education and the proportion of those students that are from low socio-economic status backgrounds. It also provided funding to improve student income support, increase research funding, and support business and public sector innovation and collaboration.
Pension Review
Finance contributed to the Pension Review undertaken by the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs, Dr Jeff Harmer, which was released on 27 February 2009. Finance participated in an inter-departmental committee to develop the government’s response to the review, announced as part of the 2009-10 Budget through the introduction of the Secure and Sustainable Pension Reform package. This package delivered increased support to those pensioners in greatest need, simplified the pension system, provided a new incentive for workforce participation, and included measures to maintain the long-term sustainability of the pension system.