Chapter 4: Sustainable Government Finances

Performance Summary

During 2005-06 Finance was effective in contributing to the achievement of sustainable government finances and performed well against the range of performance targets set out in the 2005-06 Portfolio Budget Statements for Outcome 1. The majority of performance targets set across the output groups were met.

Finance provided high quality and timely budget estimates and policy advice that supported budget decision-making and financial management. Finance played a key role throughout the 2006-07 budget process by providing extensive briefing on the policy and financial implications of new policy proposals, other budget-related initiatives and regular monitoring of and advising on the budget balances. However, most performance targets for the accuracy of the budget estimates were not achieved with a lower level of accuracy against three of the indicators when compared to 2004-05. The target for the difference between the revised estimates at budget time and final outcome was met on an accrual basis and there was a significant improvement from the result achieved in 2004-05 when measured on a cash payments basis. Finance will be working with agencies to further improve the accuracy of the budget estimates for the 2007-08 budget year, including through the introduction of new budget and cash management systems.

The financial reports produced by the department were accurate, complete and generally timely. Whilst the Australian Government's Consolidated Financial Statements for the 2004-05 financial year were not forwarded to the Auditor-General according to the timeframe required by the Financial Management and Accountability Act 1997 (FMA Act), this was due to delays arising from consideration of a range of accounting issues that affected several agencies.

The financial framework proved robust, and during 2005-06 Finance progressed several projects to improve and simplify the framework with a view to enhancing efficiency and compliance, including initiating a whole-of-government review of red tape in internal Australian Government administration.

The department was also instrumental in establishing the Future Fund, and continued to assist the Minister for Finance and Administration (the Minister) to co-ordinate implementation of the government's response to the Review of Corporate Governance of Statutory Authorities and Office Holders via a rolling programme of governance assessments for 162 entities. The superannuation arrangements for Australian Government civilian employees met the government's policy objectives. Finally, the Office of Evaluation and Audit (Indigenous Programs) undertook its evaluation and audit programme for 2005-06.

An assessment of Finance's performance against Outcome 1 performance targets is at Table 2 (from page 36), with financial and staffing resources information at Table 3 (page 40).

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