ICGFM conference, May 2011

1. “How a ‘Citizens’ Guide to the Budget’ can strengthen fiscal transparency and increase public participation” Jon Shields International Monetary Fund ICGFM Conference Florida May 18, 2011

3. Style, format and quality

5. Published by the Finance Ministry.

6. Produced at same time as budget is presented to legislature.

9. Snapshot of fiscal position and decisions.

10. Supplement to technical information required for legislatures.

12. Allows public to participate in budget debate.

13. Also - follow-up if budget is greatly amended.

14. Also - outturns should be monitored and compared.

15. Other citizen’s guides can cover :

16. Pre-Budget framework

17. Final Budget

19. IMF Code of Good Practices in Fiscal Transparency – Four Pillars Clarity of roles and responsibilities: Structure and functions of government, responsibilities within government, relations between government and the rest of the economy Open budget processes: Budget preparation, execution, and monitoring; timetable for legislature; realism of estimates and medium-term framework; fiscal sustainability. Public availability of information:Specification of the coverage, detail, and timing of fiscal information to be provided to the public. Assurance of integrity: Quality of fiscal data, internal oversight, and external scrutiny.

20. FT Code: (1) Clarity of Roles and Responsibilities: 1.1Scope of government. The government sector should be distinguished from the rest of the public sector and from the rest of the economy, and policy and management roles within the public sector should be clear and publicly disclosed. Show all ramifications of central government; QFAs, EBFs, local government relations 1.2 Framework for fiscal management. There should be a clear and open legal, regulatory, and administrative framework for fiscal management.

21. FT Code: (2) Open Budget Preparation, Execution, Monitoring and Reporting 2.1 Predictable and technically sound budget preparation. Budget preparation should follow an established timetable and be guided by well-defined macroeconomic and fiscal policy objectives. Realistic annual budget set in comprehensive economic policy framework, with measures and sensitivities assessed. 2.2 Clear procedures. There should be clear procedures for budget execution, monitoring, and reporting.

22. FT Code: (3) Public Availability of Information 3.1 Comprehensive information. The public should be provided with comprehensive information on past, current, and projected fiscal activity and on major fiscal risks. Full disclosure, as for legislature, coverage, comparability, significance, long-term outlook. 3.2 Relevance. Fiscal information should be presented in a way that facilitates policy analysis and promotes accountability. Citizens’ Guide, minimum aggregate data requirements, results 3.3. Timeliness. A commitment should be made to the timely publication of fiscal information.

23. FT Code: (4) Assurances of Integrity 4.1 Quality. Fiscal data should meet accepted data quality standards. 4.2 Oversight. Fiscal activities should be subject to effective internal oversight and safeguards. 4.3 Auditing. Fiscal information should be externally scrutinized.

25. Relative emphasis of the topics, and the level of detail, should reflect country circumstances and capacity,particularly:

26. pre-existing general level of understanding

28. Describe the budget process, including the roles of the executive branch, in preparing the budget and of the legislature in authorising government taxation, borrowing, and expenditure.

30. At least for budget year

31. Preferably for medium-term

32. Medium-term projections of the fiscal aggregates (revenues, spending, the deficit)

34. Include information on the government’s extra- budgetary activities, and their impact on consolidated government accounts.

35. Summarize and explain “quasi-fiscal activities”.

37. by administrative agency,

39. A Citizen’s Guide – Where the money will come from Breakdown of the main revenue sources, separately identifying domestic revenues (by tax) and external grants. Intended financing sources in the event of a projected deficit (use of domestic assets, domestic markets, international markets, or concessional assistance) Any implications for economic stability or fiscal sustainability.

41. Evaluate expected out-turn for the current year in comparison to its forecast in the previous budget.

42. List key fiscal risks:

43. Impacts of deviations in key economic variables from projections

44. Other specific fiscal risks (e.g. loan guarantees being called)

46. Assess expected impact of new measures on revenues and spending, and how they will contribute to the government’s priorities.

48. Identify Millennium Development Goals, where relevant.

49. Explain role of fiscal policy strategy and any numerical targets.

50. Show contribution of budget to fiscal strategy and broader objectives.

51. Explore sustainability of the public finances and public debt.

52. Describe service delivery objectives and social impacts of spending programmes, including available information on performance and evaluations.

53. Suggested chapter outline of a citizens’ guide to the budget Introduction: Place of the annual budget in public finance legislation; description of the coverage of the budget and the budget process, including opportunities for public participation. The Economic Outlook and Government Objectives: Macroeconomic forecasts, assumptions and sensitivity analysis; national development strategy; medium-term fiscal policy objectives. The Government’s Accounts and Budget Prospects: Aggregate revenues, expenditures, and the fiscal balance over medium-term; broad allocation of spending and sources of revenue, comparative figures for previous year; public debt, fiscal risks, and the sustainability of current policies and trends. New Measures: Summary of the main budget initiatives; estimates of their fiscal effect and impacts on key policy groups; contributions to meeting the government’s stated policy objectives. Improving Delivery of Services: A brief indication of what the government is doing to improve service delivery

55. Ideally, produced by Ministry of Finance

56. Treat as technical document - avoid political overlay

57. More than a budget speech

58. More than an executive summary

59. Limit jargon

60. Use layman’s terms

61. Highlight simple and attractive charts and diagrams

64. Make available in hard copy and electronic form.

65. Produce in alternative formats:

66. Video clips

67. Radio podcasts,

68. Posters

69. Pamphlets

71. How easily can the general public find out objective information about the government’s annual budget – objectives and data? Easily Through selected media Only if they are already well informed With great difficulty

72. Have you ever seen a ‘Citizen’s Guide to the Budget’? Yes, for my country Yes, for any country No