Budget Policy

In: Business and Management

Submitted By shiramsam
Words 1927
Pages 8
Process of Budget Policy

Shiram Sam
Economics of Public policy (ECN4010)
ANC/EDP 2014

DEFINING THE NATIONAL BUDGET
The budget is the most important economic policy tool of the national government. Far from being a mere compilation of income and expenditure, it is the blueprint for a nation's socio economic policies for each fiscal year.
The national budget is thus the fundamental indicator of what government proposes to do and what objectives it pursues. It presents the government's financial plans for an upcoming period and is a comprehensive statement of the priorities of the nation. Which sectors of the economy will be expected to pay for said activities; how government will respond to economic disturbances in the short term; and who will be the direct and indirect beneficiaries of public services?
The budget is about people and should respond to their needs. It is a way of determining how the Government seeks to fulfill goals for the welfare of people as set out in a country's Constitution/Bill of Rights, in international instruments and standards (e.g. MDGs), and in government policy statements.
THE FUNCTIONS OF THE BUDGET
The National Budget allocates resources, distributes wealth and income, and stabilizes the economy. The economic stabilisation function of the budget should be balanced against the need to ensure that there are adequate resources (including from external sources) to guarantee the delivery and development of essential services especially in the social sectors.
The three objectives of budgeting
The first objective of budgeting is affordability. A budget must be affordable; parliament must ensure that the total amount of spending affordable and it must control expenditure.
The second objective is prioritization; setting priorities and allocating adequate resources, this is the allocate level of spending.
The third…...

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