The Editor Speaks: Impressive Budget presentation – proof is in the eating

I give a 10 out of 10 rating to the Progressive (PPM) government’s 2013 -14 Budget presentation this week.

It was quite a change from the often rambling, spiteful attacks on the previous administration and last minute or even delayed presentations we have had over the past four years from the United Democratic Party – their leader, McKeeva Bush.

It was the norm to hear two hours of posturing of past events, pitiful wailing and crying, theatrics that belonged either at The Harquail Theatre or the Prospect Playhouse, and violent screaming at Alden McLaughlin, the Governor and the Foreign and Commonwealth Office. The actual contents of the Budget took less than 15 minutes.

This time we actually listened to two government ministers, the Premier and the Minister of Finance after the Throne Speech. The past solo act is exactly that – in the past!

The PPM even produced a 380 page document – yes you did read that right – 379 plus frontispiece entitled 2013/14 Budget Annual Plan and Estimates For the Year Ending 30 June 2014

It is quite a read and I confess I have not read all of it.

It is obviously too long to publish here but I have attached the Table of Contents

Below is the Introduction and this shows you how well thought out and professional the Budget Presentation was.

INTRODUCTION

PURPOSE

This Annual Plan and Estimates (AP&E) is the Government’s main Budget document and provides a summary of the Government’s planned policy actions and forecast financial performance for the 2013/14 financial year. These actions reflect the outcome goals, fiscal strategy and priorities established by Cabinet. This document also specifies the expenditure appropriations being requested to fund those policy actions. The appropriation request forms the basis of the Appropriation (July 2013 to June 2014) Bill, 2013.

The AP&E summarises the planned actions and financial performance at an overall government level. The performance expected to individual Government agencies and Non-Governmental Organisations supplying outputs is provided in three other sets of document that accompany the Annual Plan and Estimates:

Annual Budget Statements for each Ministry and Portfolio, which documents in detail the output delivery and ownership performance expected of each agency during the 2013/14 financial year.

Purchase Agreements, which specify in detail the outputs the Government plans to purchase from Statutory Authorities, Government Companies and Non-Governmental output suppliers in the 2013/14 financial year.

Ownership Agreements, which specify the ownership performance the Government expects of each Statutory Authority and Government Owned Company during 2013/14

CONTENT OF THE ANNUAL PLAN AND ESTIMATES

Section A contains the Government’s Annual Plan for the financial year. This plan has been developed to give effect to the Government’s strategic outcome goals. Section A includes:

• A description of the policy outcomes that the Government is seeking to influence during the year;

• A summary of the policy actions the Government intends to take to influence these policy outcomes including legislation that will be prepared and introduced, outputs that will be purchased (by group) and Transfer of Payments that will be made (by category); an

• Ownership actions that will be taken (by way of equity investments, the purchase/development of assets, loans to be made and Borrowings).

• An overview of the forecast financial performance for the Government as a whole for the financial year. These forecasts have been prepared on an accrual-accounting basis.

Section B contains the Estimates of Appropriations or the 2013/14 financial year. These appropriations are to Cabinet and are the responsibility of the assigned Minister or Official Member. Three sets of appropriations are the responsibility of Committees of the Legislative Assembly. These allow them to purchase outputs from the Audit Office, the Office of the Complaints Commissioner and Office of the Information Commissioner.

Section C contains the detailed Forecast Accrual Based-Financial Statements for the 2013/14 financial year, for the Entire Public Sector.

BASIS OF FINANCIAL INFORMATION

In accordance with the requirements of the Public Management and Finance Law (2012 Revision), all the financial information presented in the Annual Plan and Estimates (and the other budget documents) have been calculated on an accrual accounting basis.

Under Accrual Accounting

• A strict operating/capital distinction is maintained with separate statements prepared for operation activity (the Operating Statement), assets and liabilities (the Balance Sheet) and cash flows (Statement of Cash Flows);

• Operating revenue is recognised in the Operating Statement when it is due, not when the cash is collected (which is reported in the Statement of Cash Flows). Revenue due but not collected is recorded as an accounts receivable in the Balance Sheet;

• Operating expenses are recognised in the Operating Statement when the expense is incurred (usually the point the expenditure is committed) not when the cash flows out (which is reported in the Statement of Cash Flows). Expenses payable but not yet paid are recorded in the Balance Sheet as a liability; and

• Non-Cash expenses are also recognised in the Operating Statement. The major non-cash expense is depreciation. This reflects the use (or wearing out) of assets. Any write-off reduction in the value of assets is also recorded as an accrual expense, as in the increase in any liabilities (such as the unfunded public service pension liability).

END

I am very impressed. I am even more with the Finance Minister’s confident prediction of a $100.3 million surplus on June 30^th 2014.

Of course the proof will be in the eating. We have become to know that there is often more eating than is predicted. Often the whole plate is wiped clean with Oliver coming back and asking for more.

At the moment I am fairly confident this will not happen.