Professor John McHale:

That is sectoral. Part of what Senator Barrett has been talking about is what is referred to as the soft budget constraint phenomenon. This is where one threatens to impose a budget constraint but when it becomes apparent what the consequences of imposing it will be, particularly late in the year, namely, throwing patients out or people dying, it is not credible to impose it. This then has important incentives because people do not take the constraint seriously to begin with. One can design systems of accountability so that if one does need to increase the budget to prevent those terrible outcomes, they may be the personal responsibility of the people who did not control the budget in the first place. These are issues of system design that we do see as part of our remit in terms of good expenditure planning and indeed forecasting, which is very much part of our mandate.