N6 – Module 6 4 Regulate the Economy
By now you are aware of the difference between a fiscal policy (tax) and a monetary policy (money supply; see p.50). By changing tax rates and laws the economy of the country is directly affected. Although in reality economic and fiscal policy can be complicated, the basic elements and working are explained below:
By taxing people less, more money is placed into circulation – this can have the effect of stimulating the economy, thereby decreasing unemployment and increasing economic growth. However, when private expenditure rises, thereby causing higher inflation, higher taxes will place less money into circulation – people will have less to spend. Te government may use a budget policy in order to control the money supply.
5 Detail an Operating Programme
Te budget should translate overall political policy on the delivery of services into a programme which details activities and schedule in order to realise the goals and objectives of the government of the day.
For example, to simply say “we should place health care in touch with the people” is a vague political aspiration. To give details of how much to spend and how to spend the funds available is more practical and tangible. Tis type of programme allows the administrative authority to see clearly how it is expected to deliver services to the citizens of a country. It is concrete and detailed; expenditure can be measured against income and revenue. Not only does the budget reflect concrete expenditure details, it also expresses clearly a time period in which this is to be done.
Tere are three main steps in developing an operating programme: 1. Identify the broad, overall policy and direction of the government of the day. 2. Divide this policy into projects (provide more primary health care, for example), and these projects into specific activities (build more clinics in rural areas than hospitals in large cities, for example).
3. Schedule the activities of each department and ministry (health, education, protection services, etc.) in detailed sequence.
Tere are four components of an Operating Programme: • Te Objective Structure; • Te Activities Schedule; • A Resource Schedule; • Te Financial Schedule.
Te Objective Structure should reflect the broad objectives – aims, goals and policies which should be realised by any department. If the main aim is the supply of water to rural areas, for example, specific objectives should be declared. Within the main objectives, there should appear sub- objectives, and within this the specific aims which are concrete results to be reached, in order to achieve the main objective itself (the supply of more water, for example).
Te Activities Schedule is the second component. Because each public service or government department is different – education is very different to the supply of water, for example – the activities of these different departments will differ greatly. An activities schedule details plans of action, within a certain order and which are linked to a time period. Activities are sometimes referred to as functions – it is the function (duty) of the Department of Education to provide a certain level of education, for example. A group of activities may form a task or a project and the activities are identified in detail so that the authorities may see exactly what resources are required.
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