What is a strong budget?

Instead of making budget decisions based on the performance of revenues and expenditures of previous years, good public finance practice suggests that the government should structure budget decisions based on the prospects for the coming years.

The budget is a problem and an obstacle if most of the tasks that the government undertakes, such as: educating the youth, building roads, supporting the health care system, and so on, cannot be guaranteed by the budget, in the context of sustainable coverage financial over a period of many years. Not guaranteeing their full funding under the program to meet the objectives is considered a budget failure.

Moreover, these tasks will be at least as important in the future as they are today, and therefore will continue to require adequate levels of funding. It is welcome news that state budgets are on solid ground, according to the points below.

However, given the significant challenges ahead, it is difficult to be honest about future trends.

A budget, to be considered strong according to many definitions and analyzes of budgets in countries that are considered to have a strong budget situation, is that they fulfill most or all of the following requirements:

– It is accurately measured against actual spending activities over a period of time (tracking)
– It is realistic about the economic, social, and political situation
– It allows savings, especially for emergencies
– It helps institutions, the economy, and citizens to work towards the stated goals
– Integrated benefits so that well-being is not deprived
– Allows for immediate adjustment if circumstances change or initial predictions are incorrect
– It does not include additional taxes or cost of living increases guaranteeing increased disposable income
– It reflects empowering choices
– There are complete and accurate data for all segmented and social groups whose lives will be affected by the budget
– It is as complete as possible, reflecting the reactions and demands of citizens and interest groups

In the presentation of opinions and reactions on what is perceived as a strong budget, there is always room to address more or differently, since the perspectives according to interest groups give a more complete budget projection.