Besimi: With the new Law on Budgets, budgeting will be medium-term and based on results

Fatmir Besimi, Minister of Finance / Photo: MF

Budgeting will be done according to the results and the measurement of their success through indicators (Key Performance Indicators), the new Law on Budgets, which was adopted by the Parliament last week, provides. Results-based budgeting aims to ensure that key decision-makers and individual policy makers systematically take into account the results to be achieved by the realization of expenditure, i.e. the best way to improve expenditure policy-making is to use the performance information of the results. This is what the Minister of Finance, Fatmir Besimi, writes in his latest column dedicated to the new Budget Law.

"Through budgeting based on results, that is, performance, the efficiency and effectiveness of public expenditures will be improved. In order to realize the same, the general goals (related to the policies), the specific goals (related to the individual programs) and the results to be achieved, i.e. the indicators (related to the sub-programs), should be clearly defined. Also, the sums spent on a certain goal - input indicator - are determined. In this way, it will be possible to monitor in an overview and transparent way how much has been spent for a specific purpose and what are the results based on it. The expectations are that this way of planning will contribute to fiscal consolidation, which is one of the goals of the fiscal policy, but also to the improvement of the implementation of capital projects," the Minister of Finance points out.

The Law on Budgets introduces a large number of essential changes, which refer to planning, further management and execution of revenues and expenditures, as well as fiscal transparency and accountability. One of the main reforms brought by the law is medium-term planning, that is, medium-term budgeting and the five-year fiscal strategy.

"The law acts in the direction of improving the structure and content of the budget and the management of public financial and non-financial assets, including the publication of a register of public entities. A significant part of the reform is the establishment of fiscal rules and fiscal principles, as well as the establishment of a Fiscal Council, which should provide independent and professional analyzes and opinions on macroeconomic and fiscal assumptions, fiscal strategy, budget, reports on budget implementation, fiscal risks, etc. . In order to increase the accountability of the Government, a statement on the fiscal policy is introduced, which should contain the guidelines for the fiscal strategy for the duration of the mandate. At the same time, by improving the quality and quantity of reports, efforts will be made to improve fiscal transparency. Also, through the integrated information system for managing public finances - IFMIS, it will be possible to better plan and monitor the realization of revenues and expenditures in the budget," Minister Besimi points out.

The budget preparation cycle is being extended in order to give more time for good planning and inclusiveness in the preparation process, by introducing a mandatory public debate on the budget proposal, before it enters the parliamentary procedure. Also, the process of preparing the budget fits with the preparation of the three-year Program for Economic Reforms, which is being considered by the European Commission, from where recommendations for future policies and reforms of the country follow.

"We have set a framework for conducting a healthy, predictable and sustainable fiscal policy, as well as for increasing budgetary discipline and responsibility. With the new legal solution, we expect the fiscal policy to be aimed at the consolidation of public expenditures, through a gradual reduction of the deficit level, as well as the redesign of public expenditures through increased investments in infrastructure," Besimi points out.

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