It’s possible I’ve guzzled too much kool-aid – or maybe fallen irretrievably into geekdom – but I found the most interesting thing about the NSW Budget last week was the financial management system that tallied the numbers.
I am surely not the only one who felt this way.
NSW Treasurer Dominic Perrottet’s first budget was also the government’s first to use the Treasury’s new Prime FMS. For the first time the state is set up to track spending by outcome, rather than simply costing inputs.
This is surely how every government must now be thinking about budget measures (literally, how governments measure whether a particular budget line item has been successful or not.)
If nothing else, it enables a more politically tasty conversation with taxpayers about delivery and benefit rather than only about expense. Or if the spending is not effective, and the trend numbers are heading south, it gives the government timely data on which to tweak.
It accelerates iterations of policy and spending.
So instead of crowing first about plans to hire X number of additional emergency room nurses at a cost of Y – and then later bragging about delivering exactly X number of nurses– the government will also point to an outcome. Like a trend line against hospital emergency service wait times.
Yes this is geeky. But it is so obviously beneficial to the delivery of better services and for extracting better value for taxpayers that it’s a no-brainer.
Spending measured against a defined set of beneficial outcomes for citizens. What an excellent concept. This is not new thinking. To get to this point, NSW began it financial management transformation project three years ago.
But this is the first budget that demonstrates some results, and that is a milestone worth acknowledging. NSW is not the only government doing this. The Australian Government – and COAG – are working towards this outcome also.
You could of course further measure that spending and outcomes against geographic information – precisely the stuff that Finance Minister Victor Dominello gets excited about – and that also adds huge value.
The fact that Dominic Perrottet devoted section of his budget speech to such a pointy-headed issue – accounting practices and financial management software – is itself instructive.
“In this budget we are also changing the way government measures success,” Mr Perrottet told the NSW Parliament last week.
“I am pleased to report this year, for the first time, we delivered our budget in a new system and a new format, set up to track our spending by outcome,” he said.
“This means that all spending will need to be related to something that makes a difference to the lives of our citizens.
“With better information available about the outcomes achieved, Treasury will be able to use the new budgeting system to review expenditure to ensure that it is achieving the outcomes intended.
“Our reform agenda has created an environment of success which means we can now use our financial strength to make unprecedented investments into the things that matter the most,” Mr Perrottet said.
The new accounting measures have been used just within Treasury, and to a series of cross-government pilot projects that have been run under the umbrella of the Treasury’s Prime FMS roll-out.
It will be rolled out across whole-of-government departments and agencies in the coming year. The government has already introduced legislation that will enable that roll-out. The 2017-18 Budget delivered in Prime is a significant and strategic step that positions the state to commence outcome budgeting in 2018-19.
Mr Perrottet said the government is committed to building the capability and systems to embed the transformation.
This will be the first time in NSW where both financial and performance information is readily available in one central IT platform for all agencies in the public sector. This will provide government with integrated financial and performance information, supported by detailed analytics.
The functions of Prime include:
- Prioritisation and planning tools to drive whole of government collaboration programs
- Outcome and program-based information and risk reporting
- Periodic reporting and monitoring of performance metrics
- Consolidating and reporting financial and performance information by outcomes, sectors and identified priorities
The program builds on existing performance information, and will gradually expand to include more detailed and granular information so the public can better evaluate the government.
The next question will be how much of this outcome and performance data will be available to the public – in real-time – through a dashboard. That would be another important milestone. And an exciting milestone, too.
Do you know more? Contact James Riley via Email.