Presentation is loading. Please wait.

Presentation is loading. Please wait.

Government Finance Statistics in National Accounts John Verrinder Unit C5 – Validation of public accounts.

Similar presentations


Presentation on theme: "Government Finance Statistics in National Accounts John Verrinder Unit C5 – Validation of public accounts."— Presentation transcript:

1 Government Finance Statistics in National Accounts John Verrinder Unit C5 – Validation of public accounts

2 Diverse ‘government finance statistics’ Cash-based reporting (often monthly) Public Finance reports (national definitions) Accounts based on international reporting standards (IFRS/IPSAS) Government Finance Statistics –National Accounts –IMF (GFS Manual 2001) Choice of policy indicators… –In European Union >> National Accounts

3 National Accounts Complete and systematic picture of the national economy Economic basis, thus: –Accruals-based (for example, interest) –Focuses on economic actors International standards –System of National Accounts (SNA 93) –European System of Accounts (ESA 95)

4 Applying national accounts to “government” Government just one “sector” in national accounts (others: corporations, households, non-profit bodies, rest of world) Complete consistency required (e.g. taxes collected by government must be matched by taxes paid by other sectors) Few “specific” rules for government in current standards. Government a major part of value added in economy (GDP)

5 Boundary of “General Government” General Government includes: –“Non-market” producers –Bodies re-distributing wealth Contains Central Government, State Government, Local Government, Social Security Funds Includes “off-budget” funds and bodies Does not cover public corporations

6 Market / Non-market Once “autonomy of decision” is determined… Once public control is determined… Market units (public corporations) cover more than 50% of their costs from sales –Sales must be at “economically significant prices” … not government transfers or deficit financing

7 Non-financial and financial transactions Non-financial transactions (“above the line”)…direct deficit impact –e.g. wages and salaries, tax receipts… Financial transactions (below the line”) involve settling non-financial transactions, or exchanging financial instruments (currency, bonds, shares, etc) with no deficit impact –e.g. privatisation - selling shares for cash

8 The government deficit/surplus equals Expenditure – Revenue (special NA definitions) Determined by the balance of non-financial transactions… …which is conceptually equal to the balance of financial transactions (but usually not in practice) Includes impact of capital expenditure and capital taxes

9 The Excessive Deficit Procedure Maastricht Treaty (1992) sets convergence criteria thresholds as… General government deficit 3% of GDP (same as national accounts except interest on swaps / FRAs treated differently) General government debt 60% of GDP (measured gross and consolidated, at nominal value, only selected instruments) European Commission (Eurostat) responsible for providing the data –In practice countries compile and Eurostat “validates”

10 Filling in the gaps… National accounts are a broad framework Specific cases not always covered – interpretation required ‘Case law’ built up by Eurostat decisions over time in “ESA95 Manual on government deficit and debt”, for example: –Capital injections –PPPs –Securitisation –Privatisation –Military expenditure

11 Presentation of data GFS based on national accounts go beyond deficit and debt… cover: –Expenditure (economic transaction, function) –Revenue (breakdown of taxes, social contributions) –Financing (stocks and flows by financial instrument) Eurostat dedicated website on GFS:

12 Where do the data come from? National accounts usually compiled by National Statistical Institute … Financial Accounts often compiled by Central Bank Main sources of data –Ministry of Finance / Budget Office / Debt Office –Other Ministries (tax, investment …) –Individual accounts (local government, health, social security…) –Surveys (government units, banks …) National accountants integrate source data at correct timing, valuation and classification


Download ppt "Government Finance Statistics in National Accounts John Verrinder Unit C5 – Validation of public accounts."

Similar presentations


Ads by Google