Glamor Economics

Chapter 92

Chapter 13 Section 2 Annual Financial Planning - Government Budget

The government budget is the country's annual fiscal revenue and expenditure plan prepared, reviewed and approved in accordance with legal procedures. It is the main tool for the country to raise and allocate financial funds in a planned way to realize its functions, and it is the country's basic financial plan.The national budget consists of the central budget and local budgets, with the central budget dominating.

The fiscal budget system first appeared in England. In the 14th and 15th centuries, the power of the emerging bourgeoisie gradually grew, and they made full use of the parliament to compete with the feudal rulers for financial control.They require that the government's various revenues and expenditures must be planned in advance, and can only be implemented after the approval of the parliament, and the use of financial funds must be supervised by the parliament, so as to limit the financial power of the feudal monarch.

It was not until 1800 in the United States that the Ministry of the Treasury was required to report fiscal revenue and expenditure to Congress, but the financial revenue and expenditure report at this time was only a summary situation. After the American Civil War in 1865, Congress established an Appropriations Committee to be in charge of fiscal revenue and expenditure issues. From 1908 to 1909, the U.S. federal fiscal revenue and expenditure continuously ran into deficits, prompting the U.S. government to consider establishing a federal budget system.After World War I, the U.S. Congress passed the "Budget Audit Act" in 1921, which formally stipulated that the president should submit a budget report to Congress every year.

The government budget mainly has the following functions:

1.Reflect the activities or work status of government departments.The financial budget reflects the proposed use of government departments' planned expenditure items and funds.

2.Supervise the revenue and expenditure operation of government departments.The fiscal budget adheres to the principle of living within one's means, requiring the state's finances to maintain a balance in revenue and expenditure.

3.control government spending.Through the budget, government behavior can be regulated and unplanned and blind investment can be avoided.

The government's budget follows the following principles:
1.Annual Principles.It means that the government must prepare the national budget in accordance with the statutory budget year. This budget should reflect the annual fiscal revenue and expenditure activities, and at the same time, it is not allowed to include the content that does not belong to the fiscal revenue and expenditure of the current year in the national budget of the current year.The formulation and implementation of any government budget has a time limit.

The budget year refers to the valid period from the beginning to the end of the budgetary revenue and expenditure, usually one year.At present, there are two kinds of budget years commonly adopted by countries in the world: one is the calendar year budget year, that is, from January 1 to December 1 of the same year, my country implements the calendar year budget year; the other is the multi-year budget year , that is, from a certain day of the month to a certain day of the next year, there are 12 months in between, but it spans two years. For example, the budget year of the United States starts from October 31 of each year and ends on the next year Ends September 12.

2.open principle.The government budget reflects the scope, direction and policies of government activities, and is closely related to the vital interests of all citizens. Therefore, the government budget and its implementation must be made public in a certain form, so that the people can understand the financial revenue and expenditure, and be placed under the supervision of the people. .

3.Reliable principle.The numerical indicators of each income and expenditure item must use scientific methods, based on sufficient and reliable data, summarize the regularity, and carry out calculations, and cannot be fabricated arbitrarily.

4.legal principles.Different from general financial and economic plans, government budget must go through prescribed legal procedures and finally become a legal document.The legality of the government budget means that the establishment and implementation of the government budget must be reviewed and approved by the legislature.After the government budget is approved in accordance with certain legislative procedures, it will form a legal norm that reflects the scale of the country's centralized fiscal funds and their destinations.

5.principle of unity.Although all levels of government have their own financial departments and corresponding budgets, these budgets are all part of the government budget, and all local government budgets together with the central government budget form a unified government budget.This requires a unified budget subject, and each subject must be calculated and filled in strict accordance with a unified caliber and procedure.

[links to related words]

Financial budget The financial budget reflects the scope of the government and its financial activities, the policy objectives and policy means that the government wants to achieve in a specific period.A budget is a forecast and plan for the arrangement of income and expenditure in a certain period of time in the future.As a management tool, it is widely used in daily life and even state administration.As far as finance is concerned, the financial budget is a plan prepared by the government, approved by the legislature, and reflects the government's revenue and expenditure within a fiscal year.

The unitary budget system compiles all fiscal revenue and expenditure into a unified budget statement.Its characteristics are: it embodies the principle requirements of treasury unification and accounting unification; it is complete and can reflect the financial revenue and expenditure situation in the year as a whole, making it easy to understand the whole picture of financial revenue and expenditure; Understanding of the budget.

Double-entry budget Double-entry budget is to compile all fiscal revenue and expenditure in a budget year into two or more budgets according to different sources of income and nature of expenditure, usually including regular budget and capital budget.

The regular budget refers to the regular fiscal revenue and expenditure plan, the revenue obtained by the government as a social manager (such as general taxation) and used to maintain government agency activities, maintain social order, ensure national security, develop culture, education, science, health and social welfare undertakings composition of expenditures.The capital budget is a financial investment revenue and expenditure plan, which is composed of government investment expenditure and various special revenue sources.In capital budgeting, the regular budget balance and debt income are important sources of revenue.

The so-called "sunshine finance" of Sunshine Finance is to realize the scientific management of government finance activities by constructing an open, democratic, supervised and evaluated government financial management code of conduct in accordance with the requirements of building a socialist market economic system, building socialist democratic politics, and building public finance. , a system of democratization and rule of law.It is an important measure taken by the financial department to implement the "Supervision Law of the Standing Committees of the People's Congresses at All Levels of the People's Republic of China" and the State Council's implementation outline for comprehensively promoting law-based administration.

(End of this chapter)