Reflections on the Austrian COVID-19 budgetary emergency measures and their potential to reconfigure the public financial management system

Abstract

PurposeCrises constitute stress tests for public sectors, with public financial management (PFM) systems having to respond to emergency needs. In this study, the authors analyze (1) what elements of the Austrian PFM system have been affected by the COVID-19 pandemic and (2) what mechanisms have been applied to close identified gaps in the PFM system and to ensure alignment with budget principles. The authors then reflect on these PFM measures.Design/methodology/approachThe research departs from the pre-crisis configuration of the Austrian PFM system. Making use of a data triangulation strategy, the paper analyses draft laws and regulations with corresponding explanatory notes and impact assessments, transcripts from debates in the federal Parliament and articles and commentaries issued by various stakeholders.FindingsThe analysis of five areas relevant to the reconfiguration of the Austrian PFM system shows that the pandemic has caused an external shock, but at the same time, the current system has not been challenged in substance and has been utilized to react to the pandemic—resulting in (ad hoc) modifications. The system has proved robust and crisis responsive; however, in a reactive pattern, emerging ad hoc elements have been integrated, with a number of defensive mechanisms ensuring compliance with budget principles. In addition, in some areas, more proactive actions have been taken for closing system gaps (e.g. risk disclosure).Originality/valueThe authors evaluate the likelihood of (proposed, decided and implemented) emerging elements or revisions to a PFM system being embedded into the existing PFM system, alongside reflecting on results and necessary further adjustments.

COVID-19 Budget Refocusing: Evidence from Indonesia

“…The government can https://www.ilomata.org/index.php/ijtc obtain Rp 405.1 trillion to handle the effects of the COVID-19 outbreak. 27% of the fund or Rp 110 trillion is for providing social assistance (Seiwald & Polzer, 2020). The overlapping fund allocation enhances confusion.…”

Accounting for unstable environments in the public sector: managing post-COVID-19 times

“…The authors call for a transformation in public universities financial reporting to disclose and manage significant risks adequately. In Austria, instead, the public financial management systems were adapted to cope with the crises by addressing some previous limitations in relation to risk disclosure (Seiwald and Polzer, 2020). Anessi-Pessina et al (2020) focus on budgeting during crisis, suggesting governments to put greater emphasis to the anticipatory and coping roles of budgets so to be more resilient to external shocks.…”

“…Australia, on the contrary, despite the initial government support to individuals and enterprises, the subsequent measures were influenced by neoliberal features such as societal and economic inequality (Andrew et al, 2020). Of course, the capability by governments to cope with the health crisis depended not only on the quality of the financial management system (Seiwald and Polzer, 2020), but also on the overall financial conditions of governments. Where governments had fiscal space for interventions, more measures were implemented (Raudla and Douglas, 2020) while in other may limit the measures with negative impact on the economy and society (Ejiogu et al, 2020).…”

Budgetary responses to a global pandemic: international experiences and lessons for a sustainable future

“…Finally, the COVID-19 pandemic also draws our attention to other governance issues, such as the need to have a transparency and accountable budgetary process to deal with supplemental appropriations and re-budgeting (Anessi-Pessina et al , 2020; Kuo et al , 2020; Seiwald and Polzer, 2020), an open dialogue with citizens in budgeting (Cho et al , 2020; Vakulenko et al , 2020), good accounting and auditing practices to prevent frauds and abuse (Ahrens and Ferry, 2020; Ball, 2020; Demirag et al , 2020; Heald and Hodges, 2020) and effective collaborative governance to leverage the resources and capacity of non-governmental actors to address emergency needs (Johanson et al , 2020). At the same time, various studies also show how vulnerable small businesses, nonprofit and community organizations and even state-run enterprises and other hybrid organizations like public and private partnerships and social enterprises can be in an unexpected economic downturn, and how much these sectors need the financial backing of the state (Costa and Andreaus, 2020; Grossi et al , 2020; Sargiacomo and Walker, 2020).…”