The art of budgeting has always been difficult. Apart from those directly involved, few understand or appreciate the difficulties in deriving credible and accurate economic and fiscal projections. The credibility of budget forecasting has been questioned, given the continual missing of budget targets, in either direction. Even among budget planners, few anticipated the impact of the recent international meltdown on their fiscal projections and stated government targets.
It is expected that budgeting will become even more difficult in the future. The ageing of the population will have significant impacts on a country’s potential economic growth and on both government revenues and expenditures. Globalization has exposed countries to the actions of others, as witnessed by the international financial crisis. The impacts of global warning are uncertain. Governments have become involved increasingly with a variety of new financial guarantees, such as loan guarantees and public-private partnerships. With the rise in public debt in many countries, it is important that legislatures and the general public become more informed and involved in the budgetary process.
There is evidence that national legislatures are becoming more actively involved in budgetary matters. New committees have been established, charged with legislative or oversight responsibilities, budget staffs for legislative committees have been enlarged, the availability of budget related information provided to legislators and the general public have increased and there more vigilance by independent or legislative auditors in reviewing the propriety and efficiency of government expenditures.