Scrutiny in Action
The budget estimates hearings that take place in May each year help to promote government accountability and transparency. They are an important part of the state budget’s journey through parliament.
Parliamentary control of the public purse is fundamental to responsible government. One of the main functions of the Victorian Parliament is to grant the state government the authority to spend money on services such as hospitals and police; and capital works such as freeways and schools.
Under Victoria’s Constitution, the state government needs the approval of parliament to raise money through taxes, rates and duties. The state government prepares a state budget each year. Essentially this is the government’s spending plan (also known as estimates).
The budget begins its journey through parliament when the Treasurer introduces it into the Legislative Assembly (the lower house of parliament). Members of parliament get the opportunity to examine and debate the government’s spending proposals before they approve them.
The state budget is introduced as a piece of legislation, called the Appropriation Bill. This bill must be passed before the government is authorised to spend public money.
In the past, Victoria’s Constitution allowed the Legislative Council (upper house) to reject Appropriation Bills, thereby blocking supply (the financial means to govern). This has changed through reforms introduced in 2003.
The Council can still debate and consider Appropriation Bills. But, within a month of this bill passing the Legislative Assembly, if the Council rejects or fails to pass it, or returns the bill to the Assembly with amendments to which the Assembly disagrees, the bill will automatically be presented to the Governor for Royal Assent. The bill then becomes law.
The Public Accounts and Estimates Committee (PAEC) is one of parliament’s most important oversight committees. Through the annual budget estimates process, PAEC scrutinises the government’s spending plans.
Every minister is invited to appear before the committee at a public hearing in the weeks immediately after the state budget has been introduced into parliament. At the hearings PAEC members ask ministers questions about:
- the government’s objectives and planned budget outcomes
- issues of financial significance to the state, such as spending, revenue, funding or investment
- matters of significant public interest
- opportunities for enhancing public accountability and resource management
- how the presentation of budget information to parliament and the community can be improved
- how public administration can be made more economical, efficient and effective.
The committee’s report on the budget estimates contains recommendations to government and is usually tabled in the spring session – September or October each year. The government must provide its response to the committee’s recommendations in parliament within six months. For 2016‑17, the government accepted 82 per cent of the committee’s recommendations contained in its budget estimates report.
The budget estimates process generates a number of significant outcomes, including greater transparency and parliamentary control over public spending, changes to the way the budget papers and annual reports are presented, and changes to the way the performance of government departments is measured.
The schedule for the 2018-19 budget estimates hearings is available at www.parliament.vic.gov.au/paec and the hearings are webcast.