Let me try to make the analogy with cash. The importance of cash is understandable.
Cash is only one of the resources that government has. It's an important resource, but a government has many other resources. If you think about capital assets, buildings are an easy one, but military equipment that the Department of National Defence is responsible for would be another one. When you're managing only on cash, you're focused on the cash. When you're managing on an accrual basis, you're focused on all the resources that a government is responsible for. Once you start focusing on all those things, you manage differently.
I will use the pension liability example. In a way it's an easy example from the accounting perspective. I'll try not to get too technical, but there's a very big difference between looking at pensions—and governments obviously have large pension liabilities—and looking at pensions on a cash basis. On an annual basis, the government would pay a certain amount of funds to fund pension liabilities or the pensions of its employees, but on an accrual basis, it's the importance of looking long term, what that's really going to cost us down the road.
If you're only managing on a cash basis, you're managing for the next year. When you're looking longer term at the full liability, you're saying the commitment you made today to your employees has a cost beyond just today or just next year, that it has a cost down the road. Ultimately, it will flow through to future generations. There's almost a transfer of intergenerational equity. We've seen that if you're not looking at that or paying attention to that, you are less likely to manage that, and less likely to make decisions that look down the road and are longer term in nature.
Does that help?