The 6th annual OECD-Asian Senior Budget Officials meeting took place in Bangkok on 12-13 February 2009. The meeting was hosted by the Thai Bureau of the Budget, Office of the Prime Minister, Thailand. The meeting was co-chaired by Dr. Ian Watt, Permanent Secretary, Department of Finance and Deregulation, Australia, and Mr. Bandhoon Supakavanich, National Budget Director, Bureau of the Budget, Office of the Prime Minister, Thailand.
Keynote Address by the Deputy Prime Minister of Thailand, Mr. Suthep Thaugsuban.
Introductory remarks by the co-Chairs:
• Dr. Ian Watt, Permanent Secretary, Department of Finance and Deregulation, Australia
• Mr. Bandhoon Supakavanich, National Budget Director, Bureau of the Budget, Office of the Prime Minister, Thailand
Roundtable on Recent Budgeting Developments in Asia
This session was designed for participants to make informal presentations on recent budgeting and public expenditure developments in their countries. Participants exchanged information on the changes in budgetary systems and the financial management reforms which are taking place in many of the countries in the region.
Design of Budget Systems and Fiscal Outcomes
All budgeting systems aim to support aggregate fiscal discipline, the allocation of resources to where they are most valued (and away from where they are less valued), and efficiency in government operation. This session focused on the optimal design of budget systems in promoting successful fiscal outcomes. It discussed such systems as fiscal rules, medium-term expenditure frameworks, top-down budgeting and performance budgeting, as well as the role of the central budget office vis-à-vis spending ministries and the role of the legislature.
The budgeting system of Indonesia was profiled during this session. Budgeting profiles are a key tool for analysing innovations in budgeting and public expenditure practices and for making them visible in the international arena. Following a common methodology and conceptual framework, the profiles promote the sharing of experience among countries and the formulation and diffusion of relevant policy recommendations. The objective of the profiles is to provide a comprehensive overview of the budget process in the respective country and to offer other countries an opportunity to comment on specific budgeting issues in the country under review.
Budgeting for Natural Disasters
This session discussed the most appropriate budgetary treatment for the government’s share (under current policy) of losses from low-frequency, high-cost events whose size and timing are difficult to predict. The key issues are whether governments should recognise estimated costs over time before the event, rather than after – and, if so, how? The session highlighted the potential gains from ex ante budgeting for natural disasters, including smoothing national consumption, increasing incentives for mitigation and lower total cost, clarifying public policy and increasing cost effectiveness, improving the mix of public and private responsibility, and increasing “beneficiary pays” incidence. It also surveyed the potential losses from ex ante accounting and budgeting for natural disasters, including sacrificing current consumption for events that may never happen, misallocation of capital from government investment, adding uncertainty and error to budget numbers, added potential for budget gimmicks and misuse, e.g. mandated private coverage, and disregard of technical actuarial estimates. Finally, the session outlined the analytical and accounting requirements for such an ex ante treatment, including estimating expected losses and recognising expected losses in the budget.
The budgeting system of Australia was profiled during this session, following the same format as outlined above.
Report by the OECD
This session was designed to update participants on current and future projects by the OECD in the field of budgeting and public expenditures. It was also an opportunity for participants to identify emerging priority areas for future work, the nature of their interest in the subject and their willingness to participate in particular studies.