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    Public Expenditure Policies  



The deficit of the state budget is one of the most important indicators measuring the state fiscal performance. The lower is the deficit , the closer is to the right track to reform the state finance. Treating the budget deficit does not mean bringing the deficit to an end. It simply indicates a level the economy is capable to grow at without inflationary problems or recession. An issue that must be tackled within an integral development view and a broad and comprehensive perspective.

Controlling the state public deficit, as a main and general objective, stems from the interaction between two main measures :

  • Rationalizing and controlling the public expenditure
  • Developing the state resources

 First: Rationalizing and controlling the public expenditure

No doubt, the public expenses are , most of which , compulsory and irreducible. None can dare reduce, for instance, salaries, or spending on education , health , drinking water or sanitation, or dare lower subsidization or support for insurance systems ,or dare delay expenditure on public debt service.
Providing services is an authentic right for the Egyptian citizen guaranteed by the state that must be improved to give their fruits and accomplish their cherished objectives. .
Public expenditure mustn't be seen only as effective on the public deficit but as how it contributes in promoting the investment rates and creates new job opportunities.

Therefore, the following must be taken into consideration :

  • Spending is to be restricted to the effective matters relative to quantative and qualitative objectives, whose results are measured by the criteria of efficiency and performance . Therefore, it is not a matter of a mere amount of financial appropriations but of how each pound spent of such appropriations performed . Getting ready to do so is the real beginning to apply the balance of programs and performance.
  • Paying attention to maintenance as one of the basic capabilities to keep the assets and national wealth of society. This moves side by side with spending on new investments which become really meaningless when receiving no interest of maintenance to promote their efficiency or step up their productive capabilities
  • Demanding the appropriations necessary for investment projects must be accompanied with real economic feasibility studies for such projects as well as funding programs show how such projects can refund the burdens and determine their suitable economic and social return
  • Upgrading the instruments of budgeting has become compulsory. For instance, using computers systems to prepare the state budget is dictated by the requirements of the age to develop. Estimates of the budget must be made by advanced computer systems that help much follow up the usage of appropriations surely in a serious way.

     Second: Developing the state resources

    Developing the State public resources is regarded as the main element that completes the element of rationalizing and controlling the public spending in the system of controlling the deficit of state budget.

    In fact , the public resources in Egypt have become one of the important issues. Lack of resources leads to an increase in the budget deficit that can be followed by a rise in the burdens of debt service as interests and installments. Thus it 's an endless series that can be avoided through the following:

    • Exert all efforts to collect all, either tax or non-tax , dues of the state public treasury.
    • Perform an integrated program for tax reform caring about tax rates and categories so that the tax could be attractive and not dismissing. It also aims at expanding the tax community base to ensure accomplish equity among citizens.
    • Develop the tax management and performance. It 's one of the basic and important matters that need all efforts to realize . As we call for measuring the efficiency of expending, we have to call for the efficiency of revenues as well. There should be accountability on what is spent to collect the public resources with combining them so that spending on that field doesn't represent wasting of the state finance. We all have to give practical and applicable suggestions to increase the state resources. It 's an important matter and compulsory as long as it doesn't effect the low-income people and it runs in framework of social justice.

    It's important to indicate that the state public spending policies focus on several axes and aim at meeting the basic requirements for citizens and at performing the state commitments through a formula of balance among:

    • Ambition of public expenditure to realize the targeted rate of development.
    • Resources limitedness as the public resources don't grow as much as the rates of public expenditure.
    • A planned deficit should be within safe limits and covered by less-cost financing sources as can as possible.
     

    The main attitudes for the public expenditure in the state budget draft in the fiscal year 2004/2005 are as follows:

    • Social development aims at supporting and caring about low-income people and is the government's commitment to assist that category.
    • Economic development aims at carrying out investments and increasing assets of society and production as well as promoting exports.
    • Improving conditions of employees aims at raising wages and salaries as well as living standard.
    • Support the insurance systems by providing all care for pension holders.
    • Control the public debt and abide by repaying its burdens of interests and installment to reflect the state credibility in sticking to its commitments.
    • Meet the requirements of the armed forces and the interior security.
    • Care about maintaining the capitalist assets and provide the operating requirements to control the governmental stock and rationalize expenditure.
    • Activate and support the role of the economic authorities, reforming their financing structures to play their role in accelerating development.