Page 1691 - Week 06 - Thursday, 20 May 1993
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MR KAINE (3.58): I must admit to being somewhat disappointed in this debate. When I saw the words "budgetary allocations and spending policies" I thought this was going to be a wide-ranging debate on preparing budgets and implementing them. That would have allowed me to say, as I often do, that this Government has no budget strategy and that it does not know where it is going. It seems to have an unusual approach to reduced expenditure by simply saying that across the board we are going to cut by 2 per cent, or something, without very much thought to it. It turns out that the debate is about only whether a department can carry over its allocated money from one year to the next, which is a very narrow point to bring up as a matter of public importance.
Of course, you can take either side of the argument on this issue. You can argue, as Mr Stevenson has done, that departments ought to be rewarded for good management if they do not spend money, and they should be allowed to carry it over and spend it next year. I can argue just as forcefully that if you do not have constraints on how much money departments can carry over it can lead to non-performance. It can lead to failure to implement government policies because the public servants who are administering this money and running programs just do not get around to it.
They might have lots of long lunches, go to lots of courses, have a good time, and then suddenly, in May, say, "Gee whiz, we have not implemented this program yet. We will get started and if we spend only 10 per cent of the money, no worries, we can carry it over to next year and do it next year". I would not advocate that as a course of action. It could result in extreme inefficiency in the implementation of government programs and extremely poor management of public moneys. So I do not know that there is a great deal of merit in saying to managers, "It does not matter whether you perform well or badly; you can have all the money that we have allocated to you and, if you do not spend it, that is okay, we will just carry it over to next year".
That brings us, I think, to the concept of budgeting and budgetary management and the implementation of budget programs. I have some sympathy for the view that Mr Stevenson touched on but did not develop at great length, the concept of zero based budgeting. There seems to be a philosophy in the public sector, and the ACT Administration is merely an extension of the Commonwealth Public Service in this regard, that every year you start off from a basis of what you spent last year and you start arguing, "Obviously, there has been some inflation, so we should have a little bit more than that, and there are some new programs that you want us to do, so we should have a little bit for that". Nobody ever looks at the budget base and says, "Do you really need it? Does that contain provisions that were built in there 10 years ago for circumstances that pertained at the time and which no longer exist?".
So should we begin from the premise that, instead of starting from last year's budget base, we should knock 10 per cent off it? Or should we say, "Forget what you did last year; every bid for every dollar that you are going to make this year has to be justified in its own right"? I suspect that if we did that we would find lots of government programs that have been carried on year after year and that nobody has ever done a real assessment as to whether they are efficient, effective, or anything else, or whether, indeed, they even fit into this current Government's policies. They just get carried on from year to year and the inertia of the system keeps them going. So I am in favour of the concept of zero based budgeting.
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