Press release | Date: 01/12/2015 | Ministry of Finance
"We recommend that the future central government revenue and expenditure outlook be presented more clearly than at present. The freedom of fiscal policy action over the coming three to five years should be highlighted, and the future implications of individual proposals in the fiscal budget should be communicated more thoroughly. On the other hand, we advise against the introduction of multi-year appropriation resolutions and the special treatment of investment expenditure" says Øystein Børmer, the chairperson of the Committee.
Mr Børmer has over the last year been chairing a Government-appointed Expert Committee that has been examining multi-year budgets in selected areas and a clearer distinction between investments and operations in the budget.
"We believe that central government control will improve if our recommendations are adopted. Sound decision-making requires the fiscal and other implications of decisions to be examined and presented to decision makers. This is not being done adequately at present" says Mr Børmer.
"Insufficient heed is paid to future implications when designing policies. Policies are discussed and adopted that it may turn out to be difficult to implement within a responsible fiscal framework. This increases the risk that the final outcome will be suboptimal prioritisations or weak fiscal policy control" continues Mr Børmer.
The current budget system has many strong points
The Committee has also addressed issues that are often raised in discussions of central government budget processes, such as multi-year appropriation resolutions, a distinction between operations and investment, as well as whether the budget system impairs investment project progress.
"Our review of these issues leads to the conclusion that changes are not merited; I believe that we have instead highlighted the rationale behind the present arrangements in several areas. Many aspects of the current budget system are well-functioning, and it is important to retain these" concludes Mr Børmer.
The recommendations of the Committee
The Committee has presented a total of 22 assessments and recommendations. The recommendations include:
- The multi-year central government revenue and expenditure outlook should be communicated more clearly than at present. The revenue and expenditure side of the fiscal budget should being considered in relation to each other, thus shedding light on the freedom of fiscal policy action over the coming years.
- The presentations submitted to the Storting should attach more weight to economic analyses, including which alternative initiatives have been considered.
- Budgetary implications of individual proposals deliberated by the Storting should be better explained. Such implications include, for example, future operational and maintenance costs associated with new investments.
- An arrangement for central government design-to-cost project planning should be developed, to promote more realistic financial estimates in the early planning phase and to prevent scope creep.
- It should be made mandatory for central government entities to supplement the current cash-based accounts with entity accounts based on the accruals principle (in conformity with the central government accounting standards). This will promote more efficient central government resource utilisation, by better facilitating comparison and by providing an integrated and systematic overview of assets and liabilities. The fiscal budget and the appropriation resolutions of the Storting should still be based on the cash principle.
See Chapter 2 of the NOU 2015:14 Green Paper, Better basis for decision-making, better control, for a summary of the assessments and recommendations of the Committee.
Facts concerning the Børmer Committee:
- The Børmer Committee is a Government-appointed Expert Committee, which was appointed on 10 October 2014, after it was stipulated in the Government’s platform of 7 October 2013 that a new public committee were to be appointed to assess multi-year budgets in selected areas and a clearer distinction between investments and operations.
- The Committee submitted its report to the Minister of Finance, Siv Jensen, on 1 December 2015.
- The Committee has been chaired by Øystein Børmer, Director General, Norwegian Government Agency for Financial Management (DFØ). The committee has had a broad selection of professional expertise from different sectors. One of the members has been Swedish.
Øystein Børmer, Director General, Chairperson of the Committee, contact the DFØ Director of Communications, Ruth Høyland Jønsrud, telephone 951 83 108
Head of the Secretariat, Frode Karlsen, Deputy Director General, Ministry of Finance, telephone 41 40 25 21