BOX 10-2

Australia’s Experience with Long-Term Budgeting

Australia is one of the leaders in long-term budgeting. The figure immediately below shows how the long-term budget outlook improved in Australia between the first intergenerational report made in 2002 (IGR1) and the second 5 years later (IGR2).

Australian Intergenerational Report, 2007: Comparison of IGR1 and IGR2 Projections of Primary Balance

NOTE: Since IGR1, there have been some changes in projection methodologies incorporating new data and modeling approaches.

Australia’s Operation Sunlight

On April 16, 2006, the then Shadow Minister for Finance released a discussion paper entitled “Operation Sunlight—Enhancing Budget Transparency” setting out recommendations to enhance budget transparency and accountability. The report, revised in 2008, proposes that the Australian government, among other things:

  • Produce an Intergenerational Report every 3 years with greater disaggregation of expenditure information at the program level;

  • Investigate the utility of a whole-of-government triple-bottom line (economic, environment, and social) chapter in the Intergenerational Report;

  • Make it mandatory for all new programs subject to significant demographic risk be assessed and reported over a 40-year horizon consistent with the Intergenerational Report; and

  • Extend the length of forward estimates presented together with the budget from 3 to 6 years (including the budgeted fiscal year) for programs likely to be subject to demographic pressures.

SOURCE: Commonwealth of Australia (2007). Reproduced by permission.

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