Background: A recent Treasury paper, Managing for Outcomes in Queensland, has defined methods to be used for integrating requirements for accrual accounting, output budgeting and strategic planning. That paper, and supporting papers on Outcome Specification and Output Statements, are outlined in Attachments A and B.

The Proposal: The major themes of Managing for Outcomes appear to be:

• integrated planning, budgeting and performance management is intended to achieve quality, client responsive services, value for money and better resource allocation;
• emphasis will be on accrual accounting, output budgeting, better purchasing, better ownership management, and improved information;
• the planning sequence will be: identify community needs; define outcomes; specify outputs; service delivery; and performance evaluation;
• government's ownership role concerns the adequacy of investment in assets;
• as purchaser, government needs to set policy objectives / outcomes, decide on outputs to produce those outcomes, and monitor results;
• as providers, agencies must give advice to assist purchase decisions, fully cost outputs, delivery outputs with value for money, and measure / improve performance;
• resource allocation will be based on outputs from 1999-2000
• a 10 step transition process has been defined
• how outputs should be identified, and outcomes specified.

Significance: This proposal for relating the budget process to substantive outcomes appears to be a significant initiative; and one which will require adjustments by agencies. It is part of an emerging Strategic Management Framework which is concerned with the effective management of government's financial, information and human resources.

Limitations: A number of limitations in Managing for Outcomes need to be considered in the ongoing enhancement of Queensland's Strategic Management Framework, eg:

• the effectiveness of some critical Government functions (eg regulation, as well as community and economic development) has little to do with service delivery, or discrete measurable outputs. Rather they have a large effect on community welfare by influencing the framework for social and economic transactions in the community itself;
• there may be intrinsic difficulties in defining and measuring some government service outputs and outcomes;
• corporate strategic planning now tends to be less concerned with defining outputs than with leadership of organizational learning; with the prime goal of developing capabilities needed to respond to future environmental conditions;
• non-financial indicators of an organization's performance may be more important than financial criteria, and knowledge assets may be more important than financial assets;
• competitive service delivery, which has not yet been incorporated into the proposal, seems likely to complicate the proposed process for defining outcomes and outputs.

The above five issues, and some constraints on solving important social and economic problems under the existing proposal, are outlined in Attachment C.