A) Multiyear Budgeting

Date: 2015-10-07; view: 460.

B) Write down five questions about each text.

A) Read and discuss the texts.

Ex. 10.

c) Say what you know about the use of multiyear budgeting and budget classi­fication in Ukraine.

It has become quite common for ministries of finance around the world to practise some variety of multiyear budgeting. For example, Canada, Germany and the United Kingdom all have multiyear expenditure plans which get reviewed and approved every year. In these countries, the starting point for the next year's budget is the expenditure level approved for this year in the multiyear expenditure plan. Any changes to these previously approved levels have to be treated as additions to the budget, to be financed by raising total spending or by making offsetting changes in other programs.

In Germany, the annual budget is integrated in a multiyear financial plan, which is presented to parliament at the same time the annual budget is presented.

The most important objective of the multiyear financial plan is to monitor the possible existence of excessive demands on public resources.

In Canada, each year the federal government reviews and rolls forward the Fiscal Plan which comprises in more detail the current fiscal year and three more years. Each spending unit develops its own multiyear expenditure plan with the levels needed to keep the current level of services running for the next three years, which are then negotiated with the Treasury Board.

In the United Kingdom, the multiyear public expenditure survey also covers the next three fiscal years.

Even when they do not have multiyear expenditure plans other countries carry out forecasts of the financial consequences of current expenditures (for example, the future liabilities implied by increases in pension plans) or capital investment projects (such as future expenditure on maintenance and operation). For example, in Denmark, there is an appendix to the annual budget showing the expenditure level for the next three years.

From: Fiscal Management in Ukraine, World Bank, 1996.

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