Characteristics and Functions of the Government Budget
Te main instrument in which the government’s fiscal policy is expressed is the annual budget presented to Parliament by the Minister of Finance. Tis instrument or tool is used by “the legislative authority to guide the economic, social, political and other activities of a community in a certain direction in order to realise predetermined goals and objectives, the result of which are not always quantifiable” (Gildenhuys 1993:395).
Although the treasury draws up the budget in consultation with other state departments, it is done under the direct supervision of the Minister of Finance and the cabinet, and is expected to reflect the political ideals and aspirations of the government of the day. It is therefore one of the most important political documents, in which money is allocated to services, and which clearly reflects the value judgements, aspirations and ideals of the government of the day. It also outlines the hierarchy of authority in that it is the legislative body which gives authority to the administrative body (see section one) to spend money in the delivery of services to the public.
Tensions Tension exists in the sense that the political aspirations of a group of people might conflict radically with acceptable economic norms. Tis means simply that, although a minister of finance might want to build seven new dams to supply his voters/citizens with water, economic common sense might dictate that the country can only afford two, for example.
Protection of Citizens One cannot expect appointed officials in various departments, who might enjoy relative job security, to be consistently sensitive to the needs of the voters. Te budget is then a guideline, and because it is enforceable, it protects the citizen because the official is expected to act according to the wishes of the legislative authorities.
Policy Direction Te budget stipulates which authority is required to offer or provide a particular service to the public – it therefore acts also as a guideline as to what the public and private sectors are responsible for. For example, if the government of the day decides to concentrate on primary health care, and reflects this in the annual budget, showing clearly that little money has been allocated for tertiary health care, the private sector will then be able to plan to become more active within this arena. Without this statement, other sectors, organisations and bodies within a country are unable to plan their own activities.
Te most important characteristics of a budget are: • It is enforceable – once passed no official can deny citizens a particular service which has been allowed for in the budget.
• It reflects the political aspirations of the government of the day – one may clearly see what goals a government has by studying the annual budget.
• It also attempts to obey and take into consideration sound economic principles – one cannot ignore common financial sense and over-spend or over-borrow simply in order to satisfy voters.
• It attempts to satisfy the tension between purely political considerations on the one hand, and economic demands and realities founded purely in scientific research, on the other.
• It reflects the fiscal policy of the government and as well as being a financial programme with executable elements and procedures.
• It clearly outlines a hierarchy of authority – the legislative authority gives the administrative authority the legal authority and means to spend funds in delivering services to the public.
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