Photographer : Ti?n Úc |
For lots of people, the thought of numbers can seem like cruel and unusual punishment, or just a really good way to fall asleep. But when these numbers are part of a government’s budget, they mean a lot more than this.
Why does this matter?
A government’s Budget is a
plan of how that government’s money will be spent in any given year. It has two main ingredients. The first is the
amount of money it receives. For the federal government, this basically means all the tax dollars we pay (like income tax, company tax and, goods and services tax) and any other income or loans the government receives. The Budget is also made up of
all the money the government plans to spend to run the country. As you can imagine, this involves a huge amount of money. Last year, over $180 billion was received and spent by the federal government.
How is the federal Budget made?
In five easy steps…
Step 1: Prepare. The federal Treasurer, the Department of Treasury and the government Cabinet ministers prepare the Budget together.
Step 2: Present. The federal Treasurer presents the Budget to the House of Representatives in a speech called the Budget speech. It is normally about a half an hour summary of the key features of the Budget. He or she then introduces the Budget into the House of Representatives as two draft laws (draft budget laws are called appropriation bills). This normally happens every May (although it can sometimes happen in August if it is an election year).
Step 3: Debate. The appropriation bills are debated at length by the House of Representatives. Debate can be fierce, especially between the party in government and the Opposition. However, the House of Representatives will usually come to an agreement about the Budget in a matter of weeks.
Step 4: Review. When the Budget bills are presented to the House of Representatives, they are also presented to the Senate at the same time. As soon as they have heard the draft Budget, the Senate then turns to its committees which begin to run estimate hearings. These hearings allow the Senators on the committees to question government department officials about their Budget plans. This also allows the Senate to keep the departments accountable for money that has already been collected and spent. After this, the Senate will also debate the bills in the same way as the House of Representatives.
Step 5: Implement. Once the Senate and the House of Representatives have both passed the Budget bills, they are enacted as laws. This will normally happen before June 30th each year since this is the end of the financial year. The Budget is usually scheduled to start at the beginning of the new financial year, on July 1st.
What does the federal government spend the money on?
The federal government will use the money on lots of things, like the costs of running Parliament, grants of money to the states and territoris, and special new policies. However, the big expenses in the Budget are usually the federal government’s existing programs and departments. For example, between July 2003 and June 2004, the government’s four major Budget expenses were:
- defence $12.9 billion
- education $13.3 billion
- health $31.7 billion, and
- social security $80.1 billion.
To read federal Treasuer Peter Costello's Budget Speech for 2007 download the Hansard at:
BudgetSpeech2007.pdf
How do I know this?
House of Representatives, 'The Budget and financial legislation',
Infosheet No. 10, December 2004,
http://www.aph.gov.au/house/info/infosheets/is10.pdf.
Parliamentary Education Office, 'The Budget',
Fact Sheet Series No. 53,
http://www.peo.gov.au/resources/Fact_Sheets/fs_53_...
