The International Journal of Public
Vol. 14 No. 4, 2001, pp. 304-326.
# MCB University Press, 0951-3558
Public sector reform
Implications for accounting,
accountability and performance of
state-owned entities ± an Australian
Zahirul Hoque and Jodie Moll
School of Accounting and Finance, Griffith University,
Gold Coast, Queensland, Australia
Keywords Public sector reform, Public sector accounting, Australia
Abstract Faced by increased globalization, the dissatisfaction of Australian citizens, and a
curtailing of spending, the Australian Government has embarked on a major reform agenda
centered on new public management ideals to achieve greater economy, efficiency, and
effectiveness. A major driver of reform in all levels of government has been the introduction of the
national competition policy. Describes the recent developments in Australian public sector and
discusses reform implications for accounting, accountability and performance in Queensland local
governments. Suggests that accounting plays a significant role in promoting accountability,
efficiency and effectiveness of public sector services.
In recent years, the Australian Government has embarked on a wide range of
financial and administrative reforms. These reforms have two broad themes:
those which concentrate on the management control system (MCS) by
improving the information provided by the accounting systems, clarifying
roles and responsibilities and creating accountability; and those which account
for stabilizing the economy by exposing the public sector to competition
(Competitive Tendering and Contracting by Public Sector Agencies, 1996).
At the national level the two main objectives of the reform process are to:
promote a culture of performance; and to make the public sector more
responsive to the needs of Government by increasing the organizations'
accountability, promoting efficiency and effectiveness, introducing
participative decision making and adopting a customer focus. At a broad level,
the financial reform agenda includes such things as financial reporting, accrual
accounting, full cost pricing, purchaser/provider agreements, and asset
management. The administrative reform encompasses, but is not limited to,
structural reforms, labor reforms, the review of information systems and
accountability reforms. These reforms are centered on new public management
(NPM) ideals (Hood, 1990a, 1990b, 1995a, 1995b).
The introduction of NPM in the public sector has seen a shift in focus from
the adherence of formalized procedures to an emphasis on resource allocation
and goal achievement (Aucoin, 1990). Briefly, NPM encompasses the following