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Accrual accounting and Australian fiscal policy
Author(s) -
Robinson Marc
Publication year - 2002
Publication title -
fiscal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.63
H-Index - 40
eISSN - 1475-5890
pISSN - 0143-5671
DOI - 10.1111/j.1475-5890.2002.tb00062.x
Subject(s) - accrual , economics , fiscal policy , balance (ability) , fiscal imbalance , fiscal union , stock (firearms) , measure (data warehouse) , cash , macroeconomics , balance sheet , monetary economics , accounting , earnings , medicine , mechanical engineering , database , computer science , engineering , physical medicine and rehabilitation
Australian governments have recently moved from cash accounting to accrual accounting. Accrual accounting has been accompanied at the national government level by the introduction of a new key fiscal policy measure: the ‘fiscal balance’. This paper explains and evaluates this new fiscal measure. It concludes that, given the present fiscal policy of the Australian government, fiscal balance is a superior fiscal policy measure to the ‘cash’ budget balance measure which it replaced. However, from the alternative ‘golden rule’ policy standpoint, fiscal balance is not a meaningful fiscal policy measure — although its stock counterpart, net financial liabilities, certainly is.