ABSTRACT
This chapter introduces a set of concepts that will helps to understand financial management and budgeting in the government sector. It looks at policy development and management in the context of changes in managerial thinking over the last two decades. The chapter explains the annual budget cycle, which is an important process for the strategic direction of financial effort. Financial management is sometimes confused with accounting. It is underpinned by some concepts from accounting, but is much more a product of economic theory and broader managerial thinking. Assessment of outcomes is often a cause for anguish on the part of government. In Australian governments, the budget is an Act of Parliament. Ever since King John sealed the Magna Carta in 1215, governments have not been able to tax people without their permission, which is given on our behalf by our parliamentary representatives.
