Budget terms,
defined.

Accrual accounting

Australian government budgets are prepared on an accrual basis. Expenses and revenue are recorded when they are incurred or earned, not when cash changes hands. An expense can therefore be recorded in one year and paid in another.⁸

Administered item/expense

Funds an agency manages on behalf of the government under rules it does not set, such as welfare payments, Medicare benefits and grants to other bodies. The funds pass through the agency’s accounts, but the agency does not determine where they go. Administered expenses are usually far larger than departmental spending.²

Administrative Arrangements Order AAO

The instrument that sets out which matters and which laws each department is responsible for. It is reissued after a machinery-of-government change, which is what formally moves functions, and their budgets, from one department to another.²

Appropriation

Parliament’s legal authority to draw money from the Consolidated Revenue Fund and spend it. It comes either as an annual appropriation, through the yearly Appropriation Acts, or as a special appropriation written into another law. No money can be spent without one.¹

Australian National Audit Office ANAO

The independent auditor of Commonwealth entities. It checks their financial statements and the performance of their programs, and reports to the Parliament.⁹

Australian Office of Financial Management AOFM

The agency that manages Commonwealth debt by issuing Treasury Bonds and Notes and managing the government’s cash. Its reported expenses are predominantly financing flows (the issuance and refinancing of debt) rather than program spending, which is why this site excludes it from the default views.¹⁰

Australian Public Service APS

The Commonwealth’s core workforce, employed under the Public Service Act 1999. Classifications range from APS 1 to 6 through the Executive Level to the Senior Executive Service. Some bodies, such as the ABC and the Reserve Bank, sit outside it.⁴

APS 1 to 6 APS 1–6

The base classification levels of the Australian Public Service, running from entry level (APS 1) to experienced or senior officer (APS 6), all sitting below the Executive Level.⁴

Average Staffing Level ASL

The average number of full-time-equivalent staff an agency employs across a financial year, with part-time staff counted in proportion to their hours. It is the standard budget measure of agency staffing and the staffing figure used throughout this site.⁵

Budget Estimate

On this site, a year’s figures as forecast on budget night, before any of the money has been spent. It is the least settled of the three stage labels.⁵

Budget Paper No. 1 BP1

The principal budget document. It sets out the government’s economic and fiscal strategy, the major aggregates, and the outlook for the economy and the budget bottom line.⁵

Budget Paper No. 2 BP2

‘Budget Measures’: the detailed costings of each new policy decision announced in the budget, showing what each will cost or save over the forward estimates.⁵

Budget Paper No. 3 BP3

Federal financial relations: the payments the Commonwealth makes to the states and territories, including the GST distribution and tied grants for areas like health, schools and infrastructure.⁷

Budget Paper No. 4 BP4

‘Agency Resourcing’: the agency-by-agency tables of appropriations and staffing for every Commonwealth entity. Most of the federal figures on Budget Papers are read directly from it.⁵

Capital spending

Expenditure on acquiring or constructing long-lived assets, such as buildings, equipment and IT systems. It is funded through a Departmental Capital Budget rather than ordinary operating funds, and is the counterpart to operating spending.²

Commonwealth

The national (federal) government of Australia, as distinct from the eight state and territory governments. On this site, Commonwealth figures are the federal ones drawn from Budget Paper No. 4.

Commonwealth Grants Commission CGC

The independent body that recommends how the GST pool is split between the states and territories, through horizontal fiscal equalisation. Its ‘relativities’ set each state’s share.⁶

Consolidated Revenue Fund CRF

The single fund into which essentially all Commonwealth money is received. Under the Constitution, money can only leave it through an appropriation made by law.³

Contingency Reserve

An allowance built into the budget for costs that are expected but not yet assigned to a specific agency, such as programs likely to be extended. It is an accounting provision rather than funding that can be spent directly.¹

Corporate Commonwealth entity CCE

Under the PGPA Act, a federal body that is legally separate from the Commonwealth and can hold money and act in its own right, such as the CSIRO or the ABC. Compare a non-corporate Commonwealth entity.³

Departmental item/expense

The costs an agency incurs in its own operations, such as salaries, accommodation and IT, over which it has direct control. It is the counterpart to administered expenses, and usually much the smaller of the two.²

Departmental Capital Budget DCB

Funding for an agency’s own capital needs, such as equipment and office fit-outs, provided as part of its departmental appropriation. Administered capital is funded the same way, through an Administered Capital Budget.²

Efficiency dividend

A standing, across-the-board percentage cut applied each year to agencies’ departmental funding, on the assumption that they can keep finding productivity gains. It is small in any one year but compounds over time.¹

Estimated Actual

On this site, a nearly complete year’s figures as revised at the following budget. It is closer to reality than the original estimate, but not yet final, and is one of the three stage labels.⁵

Executive Level EL

The senior-officer tier of the Australian Public Service, above APS 6 and below the Senior Executive Service, split into EL 1 and EL 2. The level is typically held by managers and senior specialists who lead teams and sections.⁴

Federation Funding Agreements FFA

The framework of agreements under which the Commonwealth makes tied payments to the states for service delivery and projects. Specific Purpose and National Partnership payments sit within it.⁷

Fiscal balance

An accrual measure of the budget bottom line: revenue minus expenses, minus net spending on new assets. It is a companion to the cash-based underlying cash balance.¹

Forward estimates

The three years of projections published alongside the budget year, giving four years of figures in total. They are estimates rather than commitments, and shift at each budget.¹

Full-time equivalent FTE

A way of counting staff that converts part-time roles into the number of equivalent full-time positions, so two half-time staff count as one. It is closely related to Average Staffing Level.⁴

General revenue assistance

Unconditional payments from the Commonwealth to the states, chiefly the Goods and Services Tax, which the states may spend at their discretion. It is the opposite of a tied grant.⁷

Goods and Services Tax GST

The 10 per cent broad-based consumption tax. The Commonwealth collects it and distributes the entire pool to the states and territories as general revenue assistance, in shares recommended by the Commonwealth Grants Commission. This site excludes it from state totals by default.⁷

Government Business Enterprise GBE

A Commonwealth-owned body run on commercial lines and expected to cover its costs and turn a profit, such as Australia Post. Its ‘total expenses’ mostly reflect the size of the business rather than a cost borne by taxpayers.²

Government Finance Statistics GFS

The Australian Bureau of Statistics framework that standardises how all governments classify revenue, spending and assets, including spending grouped by function, such as health, education and defence.⁸

Gross debt

The face value of all government securities on issue. Compare net debt, which nets off the government’s financial assets. Both are managed by the Australian Office of Financial Management.¹⁰

Headline cash balance

The underlying cash balance plus the volatile items normally stripped out of it, such as net Future Fund earnings and the proceeds of asset sales.¹

Historical

On this site, a year that is closed and audited, reflecting final expenditure. It is the most settled of the three stage labels.⁵

Horizontal fiscal equalisation HFE

The principle that the GST is shared so that every state and territory can provide a comparable standard of services, despite differing capacities to raise their own revenue. A smaller state such as Tasmania receives more per person than its population alone would give it.⁶

Indexation

The automatic annual adjustment of a payment, threshold or funding amount in line with a price or wage index, so it keeps pace with inflation without a fresh decision each year.¹

Machinery-of-government change MoG

A reallocation of responsibilities between departments, in which agencies may be renamed, merged or moved between portfolios, formalised by an Administrative Arrangements Order. It is often the underlying cause of a sharp change in a budget figure between years, rather than any change in actual spending.²

Mid-Year Economic and Fiscal Outlook MYEFO

The government’s update to the budget figures, released around December, about halfway through the financial year. It revises the forecasts and accounts for decisions taken since the budget.¹

National Partnership Payment NPP

A time-limited, project- or reform-specific payment from the Commonwealth to a state, usually carrying conditions or milestones. It is the shorter-term counterpart to an ongoing Specific Purpose Payment.⁷

Net debt

Gross debt less the government’s financial assets, a narrower measure of what it owes. Compare gross debt. It is managed by the Australian Office of Financial Management.¹⁰

Non-corporate Commonwealth entity NCE

Under the PGPA Act, a federal body that is legally part of the Commonwealth, which covers most departments. Compare a corporate Commonwealth entity, which is legally separate.³

Non-ongoing employee

An Australian Public Service employee engaged for a set term or a specific task rather than permanently. Compare an ongoing employee.⁴

Ongoing employee

A permanent member of the Australian Public Service. Compare a non-ongoing employee, who is engaged for a fixed term or task.⁴

Operating spending

Money that keeps an agency running from year to year, such as salaries and supplies. It is the counterpart to capital spending on lasting assets.²

Outcome

A result the government wants an agency to achieve. Each agency’s appropriations are mapped to one or more broad outcomes, which are delivered through programs.²

Parliamentary Budget Office PBO

The independent body that costs policies and analyses the budget for the Parliament as a whole, separate from the government of the day. It is a common, non-partisan source for budget definitions.¹

PGPA Act PGPA

The Public Governance, Performance and Accountability Act 2013, the law that governs how Commonwealth entities use and account for public money and resources. It defines corporate and non-corporate entities, and special accounts.³

Portfolio

A grouping of agencies under a single Cabinet minister, such as the Health portfolio or the Defence portfolio. It is the top level of the federal structure on this site, with agencies nested beneath it.⁵

Portfolio Budget Statements PBS

The budget documents that explain each portfolio’s appropriations to Parliament and tie them to the agency’s outcomes and programs. Not to be confused with the Pharmaceutical Benefits Scheme, which shares the abbreviation.²

Program

The activity an agency runs to deliver an outcome. Spending is reported program by program, nested under the agency’s outcomes.²

Receipts

Cash actually received by the government in a year. Compare revenue, which is income earned on an accrual basis whether or not the cash has arrived.¹

Revenue

Income the government has earned on an accrual basis, whether or not the cash has yet been received. It is the accrual counterpart to receipts.¹

Senior Executive Service SES

The most senior band of Australian Public Service employees, leading agencies and major functions, above the Executive Level. It is a small fraction of the workforce by number.⁴

Special account

Funds set aside in law for a specific purpose, sitting outside the normal departmental and administered split. Special accounts allow funds to carry across financial years or to finance cost-recovered services. Some self-funded agencies hold much of their operating budget in them.²

Special (standing) appropriation

Ongoing authority to spend that is written into a specific law, rather than renewed in the annual Appropriation Acts. It is how demand-driven payments such as pensions and Medicare are funded: the law sets the rules and the money follows.¹

Specific Purpose Payment SPP

An ongoing Commonwealth payment to the states tied to a broad service area such as health, schools or skills. It is the longer-term counterpart to a National Partnership Payment.⁷

Stage (Budget Estimate, Estimated Actual, Historical)

The label this site puts on every year to show how firm a figure is: Budget Estimate (a forecast), Estimated Actual (revised and nearly complete) or Historical (closed and audited). The labels shift at budget time, not on a calendar date.⁵

Tied grant

A Commonwealth payment to a state that must be spent on a purpose the Commonwealth specifies, such as a Specific Purpose Payment for schools. Compare an untied grant.⁷

Underlying cash balance

The main headline measure of the surplus or deficit: cash receipts minus cash payments, with volatile one-offs such as net Future Fund earnings stripped out so the trend is clearer.¹

Untied grant

A Commonwealth payment that a state may spend at its discretion, the clearest example being the Goods and Services Tax. Compare a tied grant.⁷

Vertical fiscal imbalance VFI

The mismatch between the Commonwealth, which raises most of the tax, and the states, which deliver most of the services. It is bridged by transfers from the Commonwealth, chiefly the GST and tied grants.⁶

Whole-of-government WoG

Spanning all agencies at once rather than a single one, often abbreviated to WoG. Some flows, such as public-service superannuation, insurance and central asset management, are handled centrally on a whole-of-government basis, which is why a central agency like Finance can carry large administered figures that are not a delivered program.²

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