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1997-1998

Glossary of technical terms

The 1997-1998 Portfolio Budget Statements, informs Senators and Members of Parliament of the proposed allocation of resources to portfolios outcomes and their objectives and targets including the agencies within the Health and Family Services portfolio.

Additional Estimates - Where amounts appropriated at Budget time are insufficient, Parliament may appropriate more funds to portfolios through the Additional Estimates Acts. This is the Additional Estimates process.

Additional Estimates Bills or Acts - These are Appropriation Bills 3 and 4, and a separate Bill for the Parliamentary Departments (Appropriations (Parliamentary Departments)) Bill (No 2). These Bills are introduced into Parliament sometime after the Budget Bills. In 1996-97, the Budget was introduced in August 1996, and the Additional Estimates Bills in February 1997.

Appropriation - An authorisation by Parliament to spend moneys from the Consolidated Revenue Fund.

• Annotated Appropriation - Section 35 receipts, or annotated appropriations which allow a department access to certain money it receives in payment of services. These moneys are known as Section 35 receipts, reflecting their authority under section 35 of the Audit Act 1901. See also Section 9, Appropriation Bill (No.1) 1997-98.
• Annual Appropriation - Two appropriation Bills are introduced into Parliament in May (or August for 1996-97) and comprise the Budget. Further bills are introduced later in the financial year as part of the Additional Estimates. Parliamentary departments have their own appropriations.
• Special Appropriations - Moneys appropriated by Parliament in an Act separate to an annual Appropriation Act.

Audit Act 1901 - The principal legislation governing the collection, payment and reporting of public moneys, the audit of public accounts and the protection and recovery of public property. Finance Regulations and Directions are made pursuant to the Act.

Budget Measure - A decision by the Cabinet or Ministers that has been finalised since the 1996-97 Budget and has resulted in a cost or saving to outlays in the years 1997-98 to 2000-01.

Budget Outcome - (Revenues - Outlays) = The Budget Headline outcome (surplus or deficit).

Commonwealth Funds

• Consolidated Revenue Fund - This is the principal working fund of the Commonwealth and is mainly financed by taxation, fees and other current receipts. The Constitution requires an appropriation of moneys by the Parliament before any expenditure can be made from the Consolidated Revenue Fund (CRF) (s83).
• Loan Fund - Established by the Audit Act 1901, the Loan Fund contains all moneys raised by loan on the public credit of the Commonwealth. Expenditure from the Loan Fund is limited to the purpose for which the moneys were raised.
• Trust Fund - Also established by the Audit Act 1901, the Trust Fund comprises "trustee funds", the "working accounts" of certain government agencies and other funds.

Efficiency Dividend - An annual deduction of a percentage of running costs from an agency's Budget which acts both as an incentive to efficiency and a quantification of some of the efficiency gains made by an agency.

Financing Transactions - The Government funds shortfalls in revenue over outlays by borrowing from financial markets or running down financial assets. Such activities are regarded as financing transactions. If a surplus of revenue over outlays is recorded then financing transactions will show how the surplus is used.

Forward Estimates - A system of rolling three year financial estimates. After the Budget is passed, the first year of the forward estimates becomes the base for the next year's Budget estimate, and another outyear is added to the Forward Estimates.

Outlays - Is an economic concept which has its roots in international standards for government reporting agreements on national accounting. In the Budget context it measures the amount of resources which the Commonwealth sector provides for the provision of public goods and services.

It is a net concept. Not only payments are included, but some receipts enter the equation and are netted against related payments. Also not all payments may be outlays, for example, payments of principal to those holding government securities are classified as financing transactions and are not outlays, whereas interest payments are.

It is important to distinguish between Appropriations and Outlays. Appropriations derive from Acts of Parliament which authorise the drawing down of Commonwealth money for the functions and activities of Government. Adjustments to appropriations to derive outlays fall under several major headings:

• payments that are not outlays (for example loan repayments - these are financial transactions and tax refunds - netted against taxation revenues);
• Receipts that are offset within outlays - these are charges for goods and services, sales of physical assets and repayments of governments loans or repayment of equity in government enterprises; and
• Trust fund transactions regarded as outlays.

Performance Assessment - A generic term for all means of assessing the performance of an entity, incorporating both Performance Monitoring and Evaluation

Effectiveness - The extent to which a program or sub-program achieves its objective.
Efficiency - The ratio of inputs to outputs for a program, sub-program or activity.
Equity - The extent to which outcomes are proportionate to need.
Evaluation - A drawing together of existing and (possibly) specifically collected data to assess the worth or value of options and inform major decisions regarding:

• the effectiveness and future Government priority (appropriateness) of an existing policy and options for its implementation; or
• organisational effectiveness and efficiency in policy development and management.

Objective - Concise statement of intended long-term outcome of program or sub-program - in HFS, normally expressed in terms of effect upon community or target population. (Objectives are normally stable over the life of a program or sub-program).

Outcome - Effect of program or sub-program beyond direct outputs; includes unintended consequences.

Output - Product or service produced by program or sub-program to achieve desired outcomes.

Performance Indicator - One of a concise list of measures which together provide a picture of the performance of a sub-program. Indicators must be measurable, but may be qualitative or quantitative. Indicators in the Portfolio Budget Statement (PBS) are reported against in the Annual Report for the same year.

Priority Outcome - Outcome of particular relevance to the financial year to which the Budget relates (1997-98).

Quality - The success of program or sub-program in terms of process rather than outcomes or outputs, but measured from an external viewpoint, eg client satisfaction.

Strategy - Action taken to achieve goals of program or sub-program.

Target - Level of performance against a performance indicator which is considered appropriate for the year in question. Targets may be set through legislation, negotiation (eg between HFS and service provider) or Government policy. Not all indicators lend themselves to the inclusion of targets, for example in cases where government monitors an effect or impact without committing itself to saying that a particular level of impact is a target per se.

Program, Sub-program - The Program is the main unit of resource allocation. It refers to a group of outlays administered by a portfolio with a common purpose and objective, and also to the associated group of activities. Thus it can be analysed in terms of objectives, resources strategies/activities, management and performance.

There are seven programs in the HFS structure: three in the health area, three in welfare or community services, and one covering corporate activities undertaken for internal clients.

HFS Programs are subdivided into Sub-programs, usually directed toward a particular outcome for a particular client group or through a particular mode of service delivery. Most HFS performance reporting is at Sub-program level, against the objectives and priority outcomes listed in the PBS. strategies.

(In a less formal sense, "program" - with a lower-case "p" - is used to refer to groups of Departmental activities.)

Portfolio Budget Statements - Statement prepared by portfolios to explain the Budget appropriation in terms of programs.

Receipts - The total or gross amount received by the Commonwealth. Each receipt item is either revenue, an offset within outlays, or financing transactions. Receipts include taxes, interest, charges for goods and services, borrowing and Government Business Enterprise dividends received.

Revenue - The main way the government funds its outlays. It is mainly tax receipts, fees for regulatory services performed by government and interest and dividends received. Tax refunds are correcting transactions and are regarded as offsets within revenue.

Running Costs - The full current and minor capital costs consumed by an agency in providing government services for which the agency is responsible.

Section 35 receipts - See Annotated Appropriation.

Trust Account - An account held under the Trust Fund. They are used as working accounts for commercial activities or to hold moneys in trust for specific purposes under legislation.

Trust Fund Transactions regarded as Outlays - Outlays is a net measure of government activity with other sectors in the economy therefore transactions between the Consolidated Revenue Fund , the Trust Fund and the Loan Fund are consolidated and inter fund transfers disregarded. Thus an appropriation from the CRF to a Trust Account would not be an outlay. A transfer from a trust account would be an outlay, to be taken into account when reconciling total appropriations to total outlays.