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Budget pretty black and white when it comes to transparency

29 April 2020

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Professor Miranda Stewart is Director of the Tax and Transfer Policy Institute at Crawford School. She currently teaches the graduate course Public Finance (POGO8048).

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Australia’s budget is heading for the red in the wake of COVID-19, but it is in much better shape when it comes to transparency, a new report has found.

The 2019 Open Budget Survey compared budget transparency across 117 countries around the globe. The analysis of Australia’s budget transparency was undertaken by researchers at The Australian National University’s Tax and Transfer Policy Institute (TTPI).

“Budget transparency is more important than ever in the response to COVID-19,” said Professor Miranda Stewart who led the survey at TTPI.

“Government budget decisions impact on all our lives, and directly influence our wellbeing. The Australian Government response to COVID-19 included delaying the annual budget to October, from its usual date in May, as well as enacting extraordinary fiscal measures with long-term consequences.”

“The Economic Statement proposed for June will help the public understand the context and economic challenges for our next budget, which is going to be very important for the Government and the Australian people.”

The Open Budget Survey found Australia scores well on transparency. We are now ranked at number eight in the world with a score of 79 from 100 in the Open Budget Index. The OECD average is 71 from 100, according to the latest survey.

“Australia has improved its budget transparency score to 79 out of 100, up from 74 two years ago,” said Mr Teck Chi Wong, an ANU researcher who worked on the survey.

“Australia outranks most OECD peers, including the United States, France, Canada and the United Kingdom.”

“However, Australia still ranks behind New Zealand, which has topped the survey for four consecutive rounds, and Sweden and Norway. We also sit behind South Africa, Mexico and Georgia in budget transparency.”

“Given the massive amount of budget repair and economic stimulus Australia will need to take as a consequence of COVID-19, this increase in budget transparency is a welcome sign and we hope to see it continued.”
In addition to scoring 79 for transparency, Australia scored 76 for budget oversight.

“The Australian National Audit Office (ANAO) does a fantastic job of independent oversight”, said Professor Stewart.

“But as the recent ‘sports rorts’ scandal showed, we need better mechanisms to ensure responses and reforms from the executive branch following ANAO audit and inquiry findings and recommendations.

“A large proportion of sports funding was allocated to sporting groups in specific electorates that did not meet the independent criteria for funding, just before the last election.

“We also need to strengthen our legislative oversight of executive spending.”

The survey shows Australia publishes seven out of the eight budget documents assessed by the survey. However, the score for public participation was significantly lower, sitting at 41.

The only document not published by the Government is a Pre-Budget Statement.

Professor Stewart said it is unfortunate that the Government does not publish a Pre-Budget Statement as this limits public participation in the budget.

“Formal opportunities for public participation are still limited in Australia, despite Australia being better than most other countries in this regard,” she said.

The Open Budget Survey is the only independent global survey of public access to government budget decisions, covering 117 countries and more than 90 per cent of the world’s population.

Professor Stewart said there has been a marginal improvement in transparency around the world, but many governments still have extremely opaque budget processes and some have gone backwards.

“Australia is well placed to lead globally by example in budget transparency and participation,” said Professor Stewart.

“We should be continually striving to improve our budget process to support democratic accountability of taxes and spending in Australia as well as encouraging improvements in the region and globally.”

The full survey results, including Australia’s, are available at the following link: https://www.internationalbudget.org/open-budget-survey

Read analysis of the latest Open Budget Survey by Professor Stewart and Mr Wong at the ANU specialist website, Policy Forum.

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Updated:  12 August 2020/Responsible Officer:  Crawford Engagement/Page Contact:  CAP Web Team