Portfolio budgeting in the australian portfolios-principles and practice

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

In the mid-eighties Australia implemented a budgeting system that is similar in its principles to the U.S. PAYGO rule and the now defunct Policy and Expenditure Management System of Canada. Termed as portfolio budgeting, it seeks to encourage greater ministerial participation (a ministry comprising a number of related departments) in the portfolio budget process. It obligates portfolio ministers to offer offsetting savings for funding new policies. Ministers have to thereby set new policy priorities so that only the most deserving new policies obtain funding through the savings identified. Additionally, portfolio budgeting requires ministers to prioritize their ongoing programs so that budget allocation to these programs reflects ministerial priorities. The article examines the practice of portfolio budgeting in the Australian portfolios in light of these objectives. The article suggests that portfolio budgeting has caused greater ministerial involvement in budgetary management. However, there has been little significant change in budget decision making at the portfolio level. The state of play of portfolio budgeting at the national budget process (cabinet and the Department of Finance) offered little incentive to portfolios to provide offsetting savings for new policy proposals. And, the appropriation structure and the organizational and political dynamics impeded ministers from allocating and reallocating their budgets (operating expenditure or running costs) for ongoing programs along ministerial priorities.

Original languageEnglish
Pages (from-to)88-103
Number of pages16
JournalPublic Budgeting and Finance
Volume17
Issue number4
DOIs
Publication statusPublished - 1 Jan 1997
Externally publishedYes

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budget
savings
expenditures
funding policy
public budget
management
ministry
finance
funding
incentive
Canada
decision making
participation
Budgeting
costs
Savings
Budget process
Expenditure
Funding

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Public Administration

Cite this

Portfolio budgeting in the australian portfolios-principles and practice. / Xavier, John Antony.

In: Public Budgeting and Finance, Vol. 17, No. 4, 01.01.1997, p. 88-103.

Research output: Contribution to journalArticle

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