The change is included in legislation introduced to Parliament on Saturday evening to enhance the transparency and accountability of the public finance system.
“The Public Finance Act requires that fiscal forecasts, which are prepared by the Treasury, include a statement of specific fiscal risks.
“But, when I became Finance Minister I was alerted to a number of risks that were not clear in the statements I had read previously.
“I found that the statement of fiscal risks could be somewhat opaque. That did not support public understanding of risks that have the potential to impact the government’s books or the provision of public services.
“Since then, the Treasury has done a good job of categorising and transparently describing fiscal risks. This includes explicitly identifying time-limited funding and capital cost escalations.
“The Public Finance Amendment Bill makes such categorisation a requirement.”
This is a welcome change.
Anything less doesn’t give opposition parties what they need in developing policy and will ensure voters are better informed too.
The bill also dispenses with the requirement for governments to articulate the wellbeing objectives that guide Budget decisions and for the Treasury to produce a Wellbeing Report every four years.
“The previous government thought it was the first government ever to consider the wellbeing of its citizens. And that it was the first government to realise that people’s wellbeing was the ultimate purpose of the Budget.
“That is not the case. The purpose of building a stronger economy and delivering better public services is to improve the long-term social, economic, environmental and cultural wellbeing of people.
Far too many people don’t understand this – that a stronger economy is the means to better outcomes.
“While Treasury should, and does, have a broad perspective, I would like the bright and talented minds at the Treasury to focus on economic and financial advice, rather than preparing reports on whether people have friends and whether their life has meaning and purpose,” Nicola Willis says. . . .
The amendment also includes:requiring better information on tax expenditures to be provided to the public bringing the publication window of the Pre-election Economic and Fiscal Update forward five days so that the public is better informed before elections; and allowing the Government to express its fiscal strategy using alternative fiscal variables (so long as it explains its choice of variables).
More transparency is better for the opposition and voters and it ought to encourage governments to make more sensible decisions on what and how much they commit to fund.
Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.
1 comment:
i think this needs to go a bit further... any decision that impacts finances beyond current government term MUST be passed with a majority well beyond 50% (maybe 67% or 75% would be a good start). this should apply to increasing debt or signing contracts that binds future governments to pay up without having a say!
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