The budget of the Belgian federal government: an introduction May - - PowerPoint PPT Presentation

The budget of the Belgian federal government: an introduction

May 20th 2011 Tom De Bue Finance Inspection

Definition

The federal budget is :

• an estimate for one year
• of the authorized expenditures
• and the approved receipts
• of the federal government.

Budget

• Approved by the Chamber of representatives
• Approval confirms that the Government is

supported by a democratical elected parliamentary majority

• Budget is more than an estimate and an

authorization; it expresses and reflects the policy

• f the government on economical, financial and

social level.

Budget principles

• Annuality (article 174 Constitution)
• Specialty (article 180 Constitution.)
• No earmarking (exceptions apply)
• Publicity (article 190 Constitution.)

Budget documents

• 1. General Budget of expenditures (GBE)

= EXPENDITURES = LAW

• 2. Ways and Means Budget (WMB)

= RECEIPTS = LAW

• 3. General Statement (GS)

INFORMATION

Budget documents

• 1. General Statement (GS)

Contains:

• analysis and synthesis of the budgets
• economic report
• financial report
• multiannual estimates (3 years)
• note on the financial impact of the

ageing population

General statement

• Gives information on
• the budget policy of the government
• situation of the public finances
• public debt
• Gives an outline on the allocated receipts
• to the EU
• to the Regions and the Communities

General statement

• Puts the government policy in an

international context

• Forms the connexion between receipts

and expenditures

• Not voted in the House of

Representatives : GS gives information

• n the budget law

Budget documents

• 2. Ways and Means Budget (WMB)
• = A LAW
• authorisation to collect taxes
• authorisation to collect non-tax

revenues

• authorisation to contract loans

Ways and Means Budget

• Provides an estimate of all the receipts of

the State

• Empowers Government to levy taxes during

the relevant fiscal year and to raise non- fiscal revenues.

Budget documents

• 3. General budget of expenditures
• = A LAW

authorization from the House of Representatives to the Executive to perform expenditures according to the credits voted

General Budget of Expenditures

• Contains an estimate of the various items of

expenditure

• Authorization to proceed with the

expenditures listed by programme

Example = appropriation 13 56 52 33 00 01

“Grant to soccer association X” (330001) Expenditure item Items (“basic allocation”) (2) Goal of the expenditure Action (5) Goal of the expenditure Programme Soccer section (56) Which section of the department? Division Department for the interior (13) The department or agency Section

2 types of budget appropriations

• Commitment appropriations: maximum

limit on total amount of closing contracts during year T

• Payment appropriations: maximum limit on

total amounts due during year T resulting from commitments made in year T and/or previous years

Example: ‘classical’ investment

(for example: construction of a building)

1.000 € 1.000 € Total 300 € 0 € T + 2 550 € 0 € T + 1 150 € 1.000 € T Payment Commitment Year

Preparation of the budget

• prepared by the government and ministries

(public services)

• approved by a democratically elected

parliament

Preparation of the budget

What Who When Political level. Parliament Political level. Council of Ministers. Political level. Members of government and their staff and the Secretary for the Budget. Finance Inspection is involved. Administrative level. The Secretary for the Budget, the central budgetary department and the public entity involved. Finance Inspection is involved Administrative level. Central budgetary department. Introduction and approval of the budget by Parliament Before December 31th Decisions on the final budget in a so-called “conclave” meeting. New policy is introduced in the budget October Amended proposals are discussed in the so-called post-bilateral meetings. These meetings are reserved for hot items or difficult points on which no agreement has been reached. Baseline = no policy change September Bilateral meetings to discuss the proposals. Baseline = no policy change. June-July Instructions (circular letter) for preparation of the

• budget. Baseline = no policy change.

February- March

Budget law

• House of representatives votes two

documents :

– Ways and Means Budget – General Budget of Expenditures

• House of representatives receives a third

document :

– General statement (General Report)

Budgetary implementation

• Task of the executive power; each minister

for his own department

• Powers are not unlimited
• Internal budgetary control (Finance

Inspection and Engagement officer) as well as external parliamentary control (Court of Audit)

No legal link between revenues and expenditures

• If the gross domestic product (GDP) is

lower than expected and revenues are also lower, government still can spend as authorised by parliament. This means there will be a deficit, if no measures are taken.

• Therefore, in the first quarter of the year, a

budget control is held.

Budgetary adjustment

2 reasons :

• 1. Macro adjustment (government takes into

account the most recent macro-economic figures (inflation, GDP-growth, unemployment, …)

• 2. Create possibility for the government to

make minor changes in the programmes

Budgetary adjustment

• Imposed by law in the Budget and

Accounting Acts

• If necessary, the gouvernment can introduce
• ther adjustments of the General Budget of

Expenditures.

THANKS FOR YOUR ATTENTION Questions?

Tom De Bue