Transcript Public Budgets

Theme 9 – Public Budgets
Public Economics
1
The Public Sector Budgets of the
Czech Republic
• The Budget System
• Two Fiscal Statistical Systems
• The Public Finance Reform
2
The Budget system -Legal
Framework
• The budget process of the central government (the state
budget and extra-budgetary state funds) is set by the Act on
Budgetary Rules in addition to the special acts on extrabudgetary state funds.
• State Agricultural Intervention Fund, State Cultural Fund,
State Fund of the Czech Cinematography, State Fund of
Transport Infrastructure, State Environmental Fund, State
Fund for Housing Development, Estate Fund of the Czech
Republic
3
The Schedule of the Budget Process
• The schedule of the budget process starts in February and
finishes at the end of the year and is obligatory according to
the Act on Budgetary Rules.
• The state budget act and medium-term expenditure
frameworks for years n, n+1,n+2 as well as the limits of
expenditures and revenues for the chapters` (e.g.line
ministries ) budgets are approved annually.
• The draft state budget, medium- term expenditure frameworks
and limits of expenditures and revenues for the chapters`
budgets are drawn up by the Ministry of Finance followed by
the approval of the government and the House of Deputies.
4
Medium-term expenditure frameworks
• The medium-term expenditure frameworks for years n, n+1,
n+2 were included into the Act on Budgetary Rules in
connection with the decreasing of the general government
deficit and fulfilment of the commitments towards the EU.
• The medium-term expenditure frameworks involve :
state budget expenditures,
extra-budgetary state funds.
5
The Budget Process
The budget process has four main phases:
• Formulation of the draft state budget and medium- term
expenditure frameworks for years n, n+1, n+2 by the
Ministry of Finance
• Government`s approval
• Parliamentary scrutiny
• Implementation
6
Two Fiscal Statistical Systems
• There are two fiscal statistical systems monitoring the
general government/ public budgets from the different points
of view:
• The European System of National and Regional
Accounts ESA 95 (accrual-based)
• National Methodology –Fiscal Targeting (cash-based)
7
Comparison I
• The Fiscal Targeting includes just so-called public
budgets involving the central, regional and
municipal governments as well as regional councils
of cohesion regions.
• The ESA 95 covers the entire Government sector,
in other words, public health insurance companies,
government agencies, subsidiaries, funds, state
universities and other set allowance organizations.
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Comparison II
• In accrual system (ESA 95), recognition occurs with the
exchange of liabilities and /or assets, which is usually before
the cash flow and closer to actual economic impact of the
transaction.
• In contrast, the cash basis (Fiscal Targeting ), which is used
in most traditional budget systems, records outlays and
receipts only when they involve cash transactions.
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The Public Finance State – The General
Government Deficit, Debt and Fiscal
Stance
10
Ratio of state budget, extra-budgetary state funds,
and public budget balances to GDP in %
indicator
GDP in current prices in
billion CZK
Ratio of state budget balance to
GDP in % (budgetary deficit)
Ratio of extra-budgetary state
funds balance to GDP in %
Ratio of other units of public
budget balance to GDP in %
Ratio of public budget
balance to GDP in %(without
reform)
Objective according to the
Government Programme
Declaration
2007
2008
2009
2010
3 442
3 718
4 019
4 340
-2,5
-3
-2,8
-2,3
-1
-0,2
-0,1
0
-0,5
-0,7
-0,7
-0,7
-4
-3,9
-3,7
-3
-3
-2,6
-2,3
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