The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.
by Michael Ray
One of the reasons why economics is described as an inexact science is simply because a significant number of economists disagree on a variety of theories and theses. On the other hand, accounting and financial management are exact sciences. Numbers and data do not tell lies.
While some personalities believe there is no need for a national budget, there are several pieces of literature showing the benefits of a budget at both the personal and national levels.
Two key points stated by financial website Investopedia are:
• A budget is a spending plan that takes into account both current and future income and expenses.
• Having a budget keeps your spending in check and makes sure your savings are on track for the future. At the personal level, the following should be noted:
• A budget helps you figure out your long-term goals and work towards them.
• It helps ensure you don’t spend money you don’t have.
• It helps lead to a happier retirement.
• It helps you prepare for emergencies.
• It helps shed light on bad spending habits.
• It helps prevent worrying about paying the bills.
When the question arises, “why is it important for government to have a budget?”, the answer comes back: “It enables the government to plan and manage its financial resources to support the implementation of various programs and projects that best promote the development of the country”.
There are alternatives to national budgets. However, ministerial statements, medium-term projections and a mid-year report cannot replace full parliamentary debate that can be held up to public scrutiny.
Such shifting smacks of less than the necessary and required transparency, accountability and openness that are supposed to be integral components of our governance model.
Not only should government prepare yearly budgets, but should facilitate and encourage parliamentary debate so that perceived weaknesses can be highlighted and addressed when necessary.
Examination of an On-line article published at 30th December 2020 by the Economic Times newspaper presented the following in relation to why is it important for government to have a budget:
• Helps government to identify weaknesses so that resources can be allocated in a useful and sustainable manner.
• Helps government to allocate resources where they are needed the most.
• Helps government to avoid the misappropriation of resources.
• Allows government to regulate and re-arrange taxation, investment, subsidies and other areas of revenue and expenditure.
• Allows government to examine past and present data for the setting of future targets and projections.
• Helps government to stay on track and to move towards economic growth and stability.
• Helps government to mitigate against social and economic disparity and inequality within the society.
It was a hope that maintaining the custom and practice of a yearly national budget and debate in the House of Assembly would help to concretise the discipline of financial management.
The Auditor General’s reports repeatedly remind of missing financial statements from state-owned enterprises that continue to hamper the good management of government finances for so many years. Is someone suggesting that such a state of affairs should be replicated at the national level?
There are no benefits to be gained by anyone if financial statements and budgetary proposals are deleted from Parliament’s calendar.
Barbadians need to see, hear and know how the country;s finances are being managed. In the present circumstances, there is need for more transparency, accountability and openness instead of less.
There are too many good and positive reasons why governments should have an annual budget brought to parliament and the public for discussion and debate.
The taxpaying citizenry of Barbados deserves better and needs an apology.