Medium-term Budgeting in Slovak Republic

1
Medium-term Budgeting in Slovak Republic

• Alexander Cirák
• Ministry of Finance
• Slovak Republic

2
Public Finance Management ReformProject
Components

• Strengthening of macro-forecasting capacity and
  medium-term fiscal / budgetary framework
• Changes in the budgetary process
• Changes in the budget execution (State Treasury,
  Debt and Liquidity Management Agency)

3
Reform Implementation and Changes in the Budget
Process

• Programme Budgeting
• Medium-term Budgeting
• Budget Analysis
• Budgetary IT System

4
Medium-term Budgeting How does it work?

• Medium-term fiscal framework (ESA95 based
  revenues, deficit, expenditures)
• 3-years expenditure limits for the
  line-ministries (cash based)
• Government priority reserve
• Line ministries submit their budget proposal
  based on the limit

5
Medium-term Budgeting How does it work?

• Ministry of Finance analyses the budget proposals
• Bilateral negotiations with the line ministries
• Government submits the budget proposal to the
  parliament
• Parliament approves the 3-years public budget
  including the budget law for the next year

6
Medium-term BudgetingOther features

• Budget IT system includes all the expenditures
  for 3 years in all budget classifications divided
  into programmes
• Legally binding only year r1
• Each new policy document or law proposal must
  include the budget assesment for actual and next
  3 years

7
Medium-term BudgetingConclusions

• Motivation of players long-term planning
• Detailed information on actual and planned
  expenditures
• Changes in actual limits based on the new
  policies recorded in all 3 years
• Work on budget preparation simplified only
  adjustments to the limits
• Budget data more accurate in each phase of the
  budget preparation and less work with breakdown
  of the limits
• Further effort is needed to strenghten the
  binding for limits in years r2 and r3