1. BUDGET ANALYSIS PROJECT
QUEENSLAND STATE, AUSTRALIA

2. Introduction: About Queensland
 STATE OF
AUSTRALIA;
 The second LARGEST;
 The third MOST
POPULATED…
 Located NORTHEAST
of the country;
 Total population:
4’580,700…
IVY & CHENYI

3. Budget at a Glance
http://www.budget.qld.gov.au/index.php
 FOUR PILLAR ECONOMY:

4. Annual Revenue from Transactions
TAXATION revenue;
GRANTS revenue;
SALES of goods and
services;
INTEREST income;
DIVIDEND and INCOME
TAX equivalents, and;
OTHER revenue…
http://www.budget.qld.gov.au/current-budget/at-a-glance/index.php

5. Annual Expenses from Transactions
EMPLOYEES’ expenses;
SUPPLIES and
SERVICES;
SUPERANNUATION
expenses;
GRANTS expenses, and;
OTHER expenses…
http://www.budget.qld.gov.au/current-budget/at-a-glance/index.php

6. Financial Aggregates
http://www.budget.qld.gov.au/current-budget/at-a-glance/index.php

7. About Budget Process
FISCAL YEAR in Australia runs from JULY 1 to JUNE 30,
one year to the next one;
WHOLE BUDGETING PROCESS runs from OCTOBER until
MAY next year, when Australian Congress approves;
STEPS in budgeting procedure:
1. ALL GOVERNMENT must develop and approve budget
STRATEGY based on the State’s fiscal position;
2. ALL GOVERNMENT must develop budgeting PROCESS;
3. ALL GOVERNMENT must UPDATE CBRC on the State’s
fiscal position based on forward estimates;
4. AGENCIES must PREPARE and develop their PRIORITIES…

8. About Budget Process
5. ALL GOVERNMENT must submit their budget priorities;
6. AGENCIES’ portfolio ministers must advocate requests with
the CBRC;
7. AGENCIES must prepare allocation decisions and advise
outcomes;
8. AGENCIES must update their forward estimates;
9. AGENCIES must prepare, finalize and table all State budget
papers;
9. AGENCIES must submit forward estimates to Committee
Hearings;
10. ALL GOVERNMENT must consider appropriation bills;
11. AGENCIES must undertake allocation processes…

9. About Format & Info. Management
Budgeting Period: ANNUAL;
Budget classification: Focused mainly on ECONOMIC and
FUNCTIONAL criteria;
TWO RELEVANT SECTIONS: Abstract of ECONOMIC (and
fiscal) planning; and REVENUE/ EXPENSE outlook;
TWO APPROACHES: Both PROGRAMMING (mainly in
economic planning) and PERFORMANCE (mainly in
revenue/ expense outlook) focused formats;
Considers comparisons between LAST YEAR (actual) vs.
INCOMING YEARS (incoming estimate and projections), as
well as SHIFTING patterns;
Performance information is mostly focused on measuring
OUTCOMES…
ALEX

10. Format: Two Sections/ Approaches
ECONOMIC PLANNING:
PROGRAM-
FOCUSED, according to:
1. Fiscal STRATEGIES;
2. Previous year OUTCOME;
3. ANALYSIS of conditions and
economic outlook;
4. FORECAST and projections
for incoming year;
5. PERFORMANCE summary;
6. Prospects and
CHALLENGES...
REVENUE/ EXPENSE:
PERFORMANCE-
FOCUSED, according to:
1. COMPARISON in revenue
outcomes and estimates;
2. CHANGES in revenue
behavior for last 2 years;
3. COMPARISON in efficiency
vs. operation expenses;
4. DETAILS of revenue and
expense: charts, statements
and balance sheets…

11. Changes in Budget Format?
Format has (substantially) kept UNCHANGED within the last
10 YEARS (since 2001-02);
NOT NECESSARY TO CHANGE substantially the format, for
it seems transparent, reliable, understandable;
UNLIKELY the State government would have the need or
CAPACITY to change format, since the CURRENT one
seems FUNCTIONAL, however it has improved in adding
references about programs implemented and continuously
monitoring outcomes;
Anyway, the format has gradually IMPROVED in measuring
OUTCOMES (including and comparing SUCCESS
INDICATORS within the last 5 YEARS)…

12. Major Funds and Appropriations
Relevant FUNDING concepts which represent most of public
expenditure in the State:
1. OPERATING expenses: Health (24.8%) and Education (22%);
Transport and Comms. (14%);
2. GRANTS on Welfare (13%): Schools (A$2.28B), community
services (A$1.83B) and NGO’s (A$1.80B);
Major APPROPRIATIONS to public dependencies:
1. HEALTH : From A$10.55B (2010-11) to A$11.04B (2011-12);
2. EDUCATION: From A$7.58B (2010-11) to A$8.12B (2011-12);
3. TRANSPORT: From A$4.05B (2010-11) to A$4.50B (2011-12);
4. COMMUNITY: From A$3.98B (2010-11) to A$4.48B (2011-12).

13. Forecasts and Info. Handling
Revenue FORECASTING carried out by STATE TREASURY
OFFICE, in charge of gathering data, study the public
finances and publish the yearly reports regarding the actual
performance of finances balance, on the official website of
State government;
FORECASTS for INCOMING YEAR (fiscal) are included in
BOTH economic planning, and revenue/ expense outlook
SECTIONS;
FURTHER forecasts (PROJECTIONS) are also considered:
extensive to UP TO THREE YEARS in advance;
Forecasts used to CALCULATE: operating balance and
cash flow, revenue collections and liabilities, public
debt, foreign trade, wage prices, GDP growth;
departmental efficiency…

14. Format Strengths and Weaknesses
As communication tool, document seems TRANSPARENT
and DESCRIPTIVE: regarding performance in public
finances; challenges and conditions the government has to
face; as well for outcomes achieved yearly;
Document content is EXTENSIVE, in fact TOO LONG;
On the other hand, the PRACTICAL EFFECTIVENESS of
the format can be questioned, considering the budget seems
to be TOO OPTIMISTIC (very much focused on positive
outcomes and expectations) but doing little reference to
shortcomings and downgrades;
NEEDS to be more CLEAR on justifications and specific
measures to be taken in relation to planned PROGRAMS…

15. Effective Control/ Evaluation?
“MOODY’S DOWNGRADE JUSTIFIES CUTS…” (26/11/12)
http://finance.ninemsn.com.au/newsbusiness/aap/8570470/moodys-downgrades-qld-outlook
Downgrade from Aa1: STABLE to Aa1: NEGATIVE;
Rise in INFRASTRUCTURE costs;
Rise in PUBLIC DEBT;
Lack of EXPENDITURE DISCIPLINE (uncertainty in tightness
for appropriations and discresion control);
Economic RECOVERY PACKAGES proposed after 2011
floods (size of France and Germany, 75% of State’s area as
disaster area) seemed too optimistic;
Public finance must RETURN TO SURPLUS BY 2014-15
(deteriorating financial performance since 2007-08)…

16. Total Expenditure 2010-11 (A$ Billion)
Total Expenditure
2010-2011(Billion)
Annual Leave
Central Scheme
$1.27
29%
Total Expenditure
2010-2011(Billion)
Superannuation
Benefit payments
$1.14
26%
Total Expenditure
2010-2011(Billion)
Borrowing costs
$0.93
22%
Total Expenditure
2010-2011(Billion)
Long service
leave
reimbursements
$0.32
7%
Total Expenditure
2010-2011(Billion)
Grants &
subsidies
$0.22
5%
Total Expenditure
2010-2011(Billion)
All other
expenses
$0.19
4%
Total Expenditure
2010-2011(Billion)
Supplies &
services
$0.16
4%
Total Expenditure
2010-2011(Billion)
Benefit payments
$0.12
3%
Annual Leave Central
Scheme
Superannuation
Benefit payments
Borrowing costs
Long service leave
reimbursements
Grants & subsidies
All other expenses
Supplies & services
Benefit payments
ZELIG

17. Total Expenditure 2011-12 (A$ Billion)
Total Expenditure
2011-
2012(Billion)
Annual Leave
Central
$1.43
23%
Total Expenditure
2011-
2012(Billion)
Superannuation
Benefit Payments
$2.12
33%
Total Expenditure
2011-
2012(Billion)
Borrowing costs
$1.43
22%
Total Expenditure
2011-
2012(Billion)
Long service
leave
reimbursements
$0.40
6%
Total Expenditure
2011-
2012(Billion)
Grants &
Subsidies
$0.39
6%
Total Expenditure
2011-
2012(Billion)
All other
expenses
$0.20
3%
Total Expenditure
2011-
2012(Billion)
Supplies &
services
$0.16
3%Total Expenditure
2011-
2012(Billion)
Benefit payments
$0.24
4%
Annual Leave Central
Superannuation
Benefit Payments
Borrowing costs
Long service leave
reimbursements
Grants & Subsidies
All other expenses
Supplies & services
Benefit payments

18. Expenses Comparison: Two Years
Expense, 2010-
2011, 4,363,451
Expense, 2011-
2012, 6,368,034
2010-2011
2011-2012

19. Expenses Comparison: By Detail

20. Expenditure Trend
2007-2008

21. Total Revenue 2011-12 (A$ Billion)
Total Revenue
Commonwealth
grants
19,587,340
51%
Total Revenue
Taxes,fees,fines&
levies
9,358,255
24%
Total Revenue
Royalties,propert
y income&other
territorial revenue
2,977,567
8%
Total Revenue
Interest
33,781
0%
Total Revenue
Administered item
revenue
6,363,548
17%
Total Revenue
Other revenue
132,462
0%
Commonwealth grants
Taxes,fees,fines&levies
Royalties,property
income&other territorial
revenue
Interest
Administered item
revenue
Other revenue

22. Total Revenue: By Detail

23. Revenue Trend
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012

24. Revenue Trend
Duties
Payroll tax
Land tax
Other tax
Fuel subsidy
First home owner grant
Queensland huilding boost
Royalties

25. Conclusion: SWOT Analysis
JERRY
OPPORTUNITIES
STRENGTHS
WEAKNESSES
THREATS

26. Conclusion: Final Recommendations
Make an effort and implement measures enough to ADOPT
A SURPLUS POLICY:
Creating MORE JOBS by altering the style of economic
INCREASE;
 MOVE part of RESOURCE-consuming and
ENVIRONMENT-affecting INDUSTRIES to other developing
countries for cheaper natural resources and labor resources;
 Keeping cutting down governmental expenditure by
TIGHTENING APPROPRIATIONS and restricting discresion
CONTROL;
 Explore NEW FORMATS for budgeting, try to be a bit of
LESS OPTIMISTIC…

27. THANK YOU FOR YOUR ATTENTION!
CITY U MAPPM 2012/ 13