This paper addresses issues of performance budgeting, cost reduction, productivity measurement and transparency. The author notes that the really important reductions in the cost of government that have been seen in some countries over the past 25 years have been accomplished by changing the role of the government so that it costs less because it does less. Also because some governments have shifted to policy interventions that use other means than the budget to achieve their aims, for example the regulation of network industries rather than the ownership of the network companies. In the author's own country the share of government expenditure to GDP fell from 42% to 35% following a period of wide-ranging reforms. Only a fraction of this reduction came from reforming the budget system however while most was from policy change. The focus of the presentation is on what governments can do by way of more advanced budgetary techniques to improve the efficiency and effectiveness of policy programs within the budget sector.