The Budget Memorandum, Written for Dummies

A budget memorandum can be prepared in two fundamentally different ways. The first starts with a macroeconomic forecast, estimates revenue, gathers spending descriptions from government departments, sorts everything by policy area and combines it into one document.

That approach produces material. The second produces a macro-fiscal programme. It begins by defining economic and public-finance constraints, followed by objectives, measures, expected effects, costs, risks and the consequences for the budget balance and debt.

Under the first method, the macroeconomic forecast is followed by revenue estimates, spending decisions and policy descriptions. Under the second, the initial forecast is connected from the outset to objectives and measures, which are then assessed for their effects and costs.

The article argues that the memorandum's accumulation of unrelated descriptions, unfinished sentences and internal inconsistencies shows that the document was not reviewed as a whole. The criticism is presented as the author's opinion and does not necessarily reflect the editorial position of Delo.