“Public Net Worth is long overdue. It offers a vision for more sustainable public finances, through the implementation of accrual accounting and a focus on public sector balance sheets. This book presents a roadmap to more resilient governments, armed with the finance and accounting information needed to deliver more efficient and effective public services. It is a must-read for any PFM professional.”
Alex Metcalfe, Head of Public Sector, ACCA
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Five Tips to Maximize the Impact of Assets and Liabilities on Public Financial Management
While liabilities, including debt – usually attract attention, they do not represent the totality of a government’s financial position. Recognizing the interplay between assets and liabilities in public financial management (PFM) can contribute to a stronger and more stable financial position.
Government Balance Sheets for better management of assets and liabilities
Government balance sheets allow governments and citizens to understand the fiscal impact of government policies in the immediate and long term. They help inform how decisions made today may have an impact on inter-generational equity
How accountants can help save public finances
Debt-based fiscal rules as employed by most G7 countries do little to describe the problem, and even less to manage it. Understanding the true state of public finances requires a full balance sheet, driven by accrual-based accounting. This in turn will open up opportunities for better management of assets and liabilities, which will greatly assist in meeting the challenges faced by graying G7 countries and their overstretched public finances.
Does introducing Net Worth-based fiscal rules represent ‘a long walk for a small sandwich’?
By better management of assets and liabilities, we estimate that there is scope for the UK government to increase government revenues by 4%+ of GDP – very close to what the OBR estimates is needed to sustain existing levels of public services as the population ages.
Controlling debt is just a means — it is not a government’s end
Ignoring reality because it is hard to take everything into account is a big mistake.” Instead of trusting simple rules that embarrassed governments then change, we must confront reality. Governments do need to survive. But they must also do their job. Without using fuller accounts, they will fail
Thinking like an accountant- is that all bad ?
Government accounting information needed is substantially the same as that required by a large conglomerate company.
Public net worth – the measure of financial strength and success
This book aims to do more than inform or educate. It is a book with a mission: to get governments to overhaul their approach to public finance and accounting.
Tories, taxes and trains…
What is needed is smarter fiscal rules. Fortunately, a better solution is available. The key is for governments to focus on balance sheets as well as cashflows.
To fix Britain, Labour will need new debt rules
the status quo vastly undervalues public real estate holdings. Applying that metric would add 1.3 trillion pounds to UK net worth
What if public net worth is negative, and worse, if it is not known?
I recommend this book to all and more specifically to politicians, policymakers, students of government finance, and Treasury officials.
Public Accounting for Public Accountability
Responsible leaders of any political persuasion need to understand the tools that can enable them to make government finances more resilient and fairer to future generations.