Outcry over Allan government’s push to axe post-election budget update

Despite Victoria’s growing debt forecast to peak at a staggering $194bn, the government wants to scrap budget transparency measures.

The Allan government will seek to scrap budget transparency measures despite growing debt forecast to peak at a staggering $194bn.

In its Financial Management Legislation Amendment Bill to be debated this week, the government will seek to axe a post-election budget update from next year.

The Allan government is seeking to scrap budget transparency measures. Picture: Brendan Beckett

It will also attempt to limit executive oversight over the issuing of public money by ­removing the need for the state governor to approve the drawing down of funds.

The move has prompted an outcry from opposition treasury spokesman James Newbury, who has accused the government of trying to “sneakily scrap financial integrity protections”.

It has also raised concerns among economists who say scrapping the budget update in particular would weaken oversight of the government’s ­financial management.

Current legislation requires a budget update to be prepared each financial year, and is usually made public in December.

James Newbury accused the government of trying to ‘sneakily scrap financial integrity protection’. Picture: Luis Enrique Ascui

Under proposed changes, this would not apply in the event a pre-election budget update is released on or after September 15.

It means no budget update would be necessary next year provided the government publishes its pre-election budget ahead of the November 28 election.

Independent economist Saul Eslake said the crucial budget update should remain regardless of any looming election.

“Normally there would be information released between the pre-election update and the ordinary timing of the mid-year review (budget update) that would likely be relevant to the budget numbers, and therefore it would not be unreasonable to think that numbers prepared ahead of the election might change,” Mr Eslake said.

He said annual state accounts, released in November, and the December release of the September quarter national accounts, would not be reflected until the following May budget. “The budget update is very important, it gives you an account of what has changed, that is the economic and other assumptions, and will give you an update on any policy decisions the government has made including election commitments,” he said.

Mr Eslake said this was even more important in the event of a change of government.

The government will also seek to remove requirements relating to warrants to issue public money which would require constitutional change.

Department of Treasury and Finance documents explain warrants as the legal instrument required to draw down actual funds from the Consolidated Fund. Each year’s ­Appropriation Act requires a warrant to be prepared and authorised before funds can ­legally be drawn down from the Consolidated Fund.

Warrants, prepared by Treasury officials, are signed by the Treasurer, countersigned by the Victorian Auditor-General and then approved by the ­Governor.

Until this occurs, no funds may legally be drawn down from the Consolidated Fund, however the update would remove this requirement.

Mr Eslake said he was less concerned about this archaic practice, but Mr Newbury ­accused the government of attempting to hide its spending.

“Only Labor would try to stop the Governor from signing off on how much money it spends and hide that spending through less frequent budget updates,” he said.

Treasurer Jaclyn Symes last week met with ratings agencies in New York to discuss the ongoing risk of a credit downgrade affecting Victoria.

A government spokesman said the changes would have no impact on budget transparency. “This is rubbish from Liberals who are desperate to distract from their growing internal bankruptcy scandals and leadership crisis,” he said.

“Warrants are an inefficient and ineffective practice developed nearly 200 years ago. This will bring Victoria in line with all other jurisdictions.”

Originally published as Outcry over Allan government’s push to axe post-election budget update