The document discusses the public budget process in Palestine. It defines a public budget as a program outlining expected government revenues and expenditures for a fiscal year, which runs from January to December. The budget process involves preparation by ministries, approval by legislative councils, execution by the government, and monitoring. Key parts of the Palestinian public budget include expenditures on salaries, services, and development projects, as well as revenues from taxes, aid, and other sources. Historical budget data from 2009 to 2015 is presented.
2. What do we mean by Public Budget
Public Budget in Palestine:
a designed program that shows the expected Public earnings and
expenditures in Palestine for a specific fiscal year.
The Fiscal year usually starts from January and ends on the next
December.
3. The Form of public budget
A. Public Expenditure
Current expenditure
Capital expenditure
B. Public earnings
Local earnings
Aid & Grants
Capital earnings
Money printing
4. Public Expenditure
The Palestinian public expenditure can be categorized in:
Current expenditure
Current expenditure is expenditure on goods and services consumed within the current year,
which needs to be made recurrently to sustain the production of educational services. Minor
expenditure on items of equipment, below a certain cost threshold, is also reported as current
spending.
Current expenditure includes final consumption expenditure, property income paid, subsidies
and other current transfers (e.g., social security, social assistance, pensions and other welfare
benefits).
payroll expenditure [wages and salaries]
Non-payroll expenditure [allowances, internal and external work tasks fees ..etc.]
Net loan expenditure [the collected amounts of money from local governorates and electricity co. which deducted
from the Palestinian-Israeli tax clearance]
Others
5. Capital expenditure [ the governmental spending on activities which doesn’t executed in an
ordinary biases, such as high way establishments, sometimes they refer to as development
expenditures]
Financed from the treasury.
Financed from grants and donations.
6. Public Expenditures in Palestine 2009-2015 in million dollar
2009201020112012201320142015Items
3,375.93,200.13,254.63,258.23,419.13,606.93,621.4Total expenditures and net lending
3,190.02,927.32,960.13,047.13,250.73,445.93,445.0Current expenditures
1,467.01,563.11,677.91,557.71,813.81,899.61,759.5Gross wages and salaries
1,349.01,120.91,142.31,212.21,225.71,259.01,352.3Nonwage expenditures
374.0243.3139.9277.2211.2287.4300.5Net lending
______32.8Earmarked Payments*
185.9272.8294.5211.0168.4160.9176.4Capital Or Development expenditures
139.1194.0125.556.061.6-40.186.8Financed from treasury
46.878.8169.0155.0106.8201.089.7Financed from grants and donations
Source: Palestinian monetary authority, 2015
7. Public earnings
The Palestinian Public earnings categorized as follow :
Local earnings
Taxed earnings
Direct tax
Tax on income
Tax on Capital
Tax on real state
Indirect tax
Value added tax
Tariffs & customs
Non-Taxed earnings [e.g the governmental charges]
(tax refunds) [the financial settlement between Public and private sector].
Earnings from charges
Earnings from Public loans
8. Public earnings (Cont.)
Gross tax clearance revenues [the Palestinian-Israeli tax settlements, taxes that
collected by Israel instead of the Palestinian authority; then these amounts should be
transferred to the Palestinian budget]
Aid & Grants [local and foreign aids for budgetary support and development expenditures]
Capital earnings [earnings from gov. assets]
Money printing [the process of issuing new money]
9. Public earnings in Palestine 2009-2015 in
million dollar
2009201020112012201320142015Items
2,950.43,055.73,160.33,172.33,677.94,021.73,688.2Total net revenues and grants
1,548.61,845.42,177.02,240.12,319.92,791.22,891.4Total net revenues
458.6611.2688.0665.7629.4736.9844.5Gross domestic revenues
301.5439.0482.3483.2597.2604.0606.6Tax revenues
283.6254.5219.2232.1254.4270.5249.8Nontax revenues
______56.4Earmarked Collections*
(126.5)(82.3)(13.5)(49.6)(222.1)(137.6)(68.2)Tax refunds
1,090.01,234.21,488.91,574.41,690.52,054.32,046.9Gross clearance revenues
1,401.81,210.3983.3932.11,358.01,230.4796.8Grants and donations
1,355.01,131.5814.3777.11,251.21,029.4707.1External budgetary support
46.878.8169.0155.0106.8201.089.7
External financing for development
expenditures
Source: Palestinian monetary authority, 2015
10. Public Budget Balance
The difference between Public earnings and Public expenditures, we
call the Public Budget is in a surplus when the earnings exceed the
expenditures, and call the Public Budget is in a deficit when the
earnings less than the expenditures.
11. Public Budget Balance in Palestine 2009-2015
in million dollar
2009201020112012201320142015Items
2,950.43,055.73,160.3
3,172.
3
3,677.94,021.73,688.2Total net revenues and grants
3,375.93,200.13,254.63,258.23,419.13,606.93,621.4Total expenditures and net lending
(425.50)(144.40)(94.30)(85.90)258.80414.8066.80Public Budget Balance
Source: Palestinian monetary authority, 2015
12. The Budget Public Cycle
• The Budget Public Cycle can be defined as the continued process that
the public budget has to pass through its lifetime.
13. The Budget Public Cycle passes through four
levels as follow: Preparation level
Endorsement level.
Executing level.
Monitoring level.
14. Public Budget Preparation level.
The executive authorities are responsible about preparing the Public
Budget, in Palestine the government is the legal entity that responsible
about preparing and implementing the Public Budget.
The Government supposed to acquire the required abilities and
experiences in order to prepare the Budget.
15. Public Budget Preparation steps
1. During the ministers counsel meeting; the member (the ministers) were
asked to prepare a separated budgets for each ministry.
2. Each minister design an internal committees in order to discuss their
expected earnings and expenditures for the next year.
3. Each ministry send its estimation to the ministry of finance.
4. The ministry of finance has the right to discuss other ministry’s budget
before the acceptance.
5. The minister of finance combine each ministry budget in order to design
the Public budget; this Public Budget should reflect the government's
goals for the next year.
6. The projected Public Budget handled to the ministers counsel to be
discussed before Presenting it to the legislative counsel.
16. Public Budget Endorsement level
Before endorsing the Public Budget; it should pass Four steps:
1. The ministers counsel handle the designed Public Budget to the
legislative counsel before two months of the fiscal year end.
2. The legislative counsel pass the handled Public Budget to committee of
Budget and financial affairs (an internal committee) in order to study it
and provide recommendations.
3. The legislative counsel held a session to discus the handled Public
Budget, after the discussion the ministers counsel has to apply the
discussed edits through a period of time doesn’t exceed two weeks.
4. The legislative counsel vote for each item mentioned in the Public
budget.
17. Execution level
The government is the responsible entity to implement the Public
Budget through collecting earnings and allocating expenditures as
designed in details in the Public Budget.
• Once authorized by parliament, the budget allocations should be
implemented fully and faithfully by the agencies of government, with
oversight throughout the year.
• Parliamentary authorizations should allow ministries and agencies
some limited flexibility to reallocate funds throughout the year in the
interests of effective management and value-for- money.
18. Monitoring level
The monitoring level works side by side with the execution level, the
purpose for Monitoring level is to be sure that the designed Public
Budget is performed in an efficient and effective way or not.
There are three monitoring types:
- Managerial monitoring: an internal monitoring through the
government
- Legislative monitoring: the legislative council held sessions to
interrogates any party of the executives.
- Independent monitoring: NGOs, media .. Etc.
19. The fundamental national role of the budget
• The budget is a central policy document of government, showing how
it will priorities and achieve its annual and multi-annual objectives.
• The budget is the primary instrument for implementing fiscal policy,
and thereby influencing the economy as a whole.
• the budget is a contract between citizens and state, showing how
resources are raised and allocated for the delivery of public services.
• External stakeholders also look to the quality of the budget
document, and of the budgeting process, in assessing the soundness
and reliability of a state.
20. Four types of Public Budgets
There is no one acceptable type to prepare a public budget, there are
common sense but each type of public budget has different
characteristics according to the nature of the involved party.
These types as follow:
1. The traditional public budget.
2. Performance and programmed public budget.
3. Planned public budget.
4. Zero-based public budget.
21. The traditional public budget.
It is the first used public budget in the world, UK was the first country
to use that type of public budget, nowadays its commonly used in
developing countries.
The traditional public budget usually combine the governmental
earnings and expenditures in one sheet, each item listed in that sheet
should be classified in details.
22. Performance and programmed public budget
The main purpose for this type of public budget is to direct the public
earnings into achieving previously designed programs; thus the goal
there is to achieve the goals without considering the budget constrains.
According to Performance and programmed public budget the
governmental activities should be split into programs, for each program
there is a separated goal, each program splits into sub-programs, for
each sub-program there are several objectives to be achieved in order
to fulfill the main goal.
Performance and programmed public budget mostly used by ministers
rather than governments.
23. Planned public budget
This type of public budget used for long term planning in order to
achieve the sustainable and long-term goals
Highly developed countries mostly use planned public budget.
24. Zero-based public budget.
Mainly this type of public budget concentrate on financing the
designed programs without looking for past data; by using this kind of
budget we have to assume that previous projects were not existed
before.
Zero-based public budget mostly used by small or local governments,
also it could be suitable for NGO’s budgets.
25. In Palestine the most common used type of public budget is the
traditional public budget, as it suites the nature of the economy as a
developing country.