To read the full version of this content please select one of the options below:

Australian government budget balance numbers: The hybrid nature of public sector accrual accounting

Graeme Wines (School of Accounting, Economics and Finance, Deakin University, Warrnambool, Australia)
Helen Scarborough (School of Accounting, Economics and Finance, Deakin University, Warrnambool, Australia)

Accounting Research Journal

ISSN: 1030-9616

Article publication date: 7 September 2015




The purpose of this paper is to analyse the nature and comparability of budget balance (surplus/deficit) numbers headlined by the Australian Commonwealth Government and the governments of the six Australian States and the two Australian Territories. It does this in the context of the transition to Australian accounting standard AASB 1049 Whole of Government and General Government Sector Financial Reporting.


A case study research method is adopted, based on a content/documentary analysis of the headline budget balance numbers in the general government sector budget statements of each of the nine governments for the eight financial years from 2004-2005 to 2011-2012.


Findings indicate some variation in the measurement bases adopted and a number of departures from the measurement bases prescribed in the reporting frameworks, including AASB 1049. Findings also reveal that none of the nine governments have headlined a full accrual based budget balance number since the implementation of AASB 1049 in 2008.

Research limitations/implications

While the study focuses on the Australian general government sector environment, it has significant implications in highlighting the ambiguity in the government budget balance numbers presented and the monitoring and information asymmetry problems that can arise. Research findings have wider relevance internationally in highlighting issues arising with the public sector adoption of accrual accounting.

Practical implications

The paper highlights the manner in which governments have been selective in the manner in which they present important budget aggregates. This has important practical and social implications, as the budget balance number is one of the most important measures used to evaluate a government’s fiscal management and responsibility.


The paper represents the first detailed examination of aspects of the effect of the transition to AASB 1049.



The authors wish to acknowledge the valuable comments of Prof Paul Collier and seminar participants at Deakin University (School of Accounting, Economics and Finance), Griffith University (Department of Accounting, Finance and Economics) and RMIT University (School of Accounting). The paper has also benefited from suggestions of participants at the 2012 Annual Conference of the Accounting and Finance Association of Australia and New Zealand (AFAANZ). The authors especially thank The Institute of Chartered Accountants in Australia (ICAA) for funding for the research project.


Wines, G. and Scarborough, H. (2015), "Australian government budget balance numbers: The hybrid nature of public sector accrual accounting", Accounting Research Journal, Vol. 28 No. 2, pp. 120-142.



Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

Related articles