Sixty-three percent of Australians think our political system is more concerned with short-term gains than addressing long-term challenges affecting us, according to a 2023 poll. Australia has little-known rules in place around our federal budget that could be amended to help us in planning for the long term.
Banking the benefits: Better aligning budget process rules with Measuring What Matters details how the federal Budget Process Operational Rules (BPORs) can be reformed to incentivise long-term, holistic policymaking that prioritises wellbeing.
Banking the benefits: Better aligning budget process rules with Measuring What Matters suggests reforms to the federal budget rules that would allow more early intervention and prevention initiatives to be prioritised, in line with the aims of the government’s wellbeing framework.
The BPORs detail how federal decisions about policy proposals are made, who can make the decisions, and what information must be included as part of the decision-making process. These rules currently state that: “Only first round effects will be considered in costings.” The inability to consider second round fiscal effects and ‘bank’ the savings from certain policies can act as a barrier to policy proposals that have significant, long-term benefits for society, such as those with a focus on early intervention and prevention. It also contributes to understating the costs of other policies that may achieve targets in one portfolio, but at the expense of outcomes in another portfolio.
Second round fiscal effects (SFREs) are the costs or savings for government due to increased or decreased demand for government services – such as improved health translating into less demand for health services.
The report recommends the following changes to the BPORs:
It’s possible to drive major benefits, both for the health and wellbeing of Australians, and for the budget’s bottom line. What’s needed is a long-term approach that supports improved wellbeing for people now and for generations to come.
