Before projects can be funded and salaries paid in the German-speaking Community, Parliament must approve the budget. The budget is a list of the expected income and the planned expenses in the course of one year.
In the German-speaking Community, the budget regulation is managed by decree. On 25th May 2009, the Parliament adopted the decree on the Financial Regulation of the German-speaking Community. The institutions of the German-speaking Community, be it the central administration or the affiliated services, must comply with the rules of the decree.
The Parliament itself also adopts an internal operating budget.
What is the purpose of a budget?
The budget gives many opportunities for action and is an important instrument of democracy. The budget reflects the room for manoeuvre and the financial requirements for the course of one year. It is adopted by Parliament, in other words by the representatives of the people. Thus, it becomes the basis for the government's decisions, because without a budget the government can’t take actions.
Public budgets work according to certain principles. The most important principles are:
- annuality: A budget covers a calendar year from 1st January to 31st December.
- unity and completeness: Revenue and expenditure are presented in a single budget. Completeness means that all the information is listed in its entirety. Black accounts are forbidden.
- economy, efficiency and effectiveness: The administration has to be economical. This means that a goal should be achieved with as few resources as possible and that is must be as useful as possible. The administration must also act economically; waste must be avoided.
- public: The budget is accessible to everyone. Every citizen has the right to consult the documents.
- preliminary authorisation: The budget decree is adopted before the start of the financial year. For this reason, debates on the budget take place according to an agreed schedule at the end of the year.
The revenue budget is an estimate of the resources available to the German-speaking Community during a financial year.
The revenue of the German-speaking Community is essentially made up of:
- the endowment of the federal state: this is a lump sum fixed by law which the federal state transfers to the Community each year. The endowment of the federal state shall be adapted to:
- the rate of variation of the consumer price index,
- the growth of the gross national product, and
- the growth rate of student numbers.
- funds provided by the Walloon Region in the context of transfers of regional matters;
- from own resources other than taxes (interest on reserves, gifts, estates, recoveries, etc.);
- possibly from mortgages;
- possibly from its own taxes: in principle, the German-speaking Community could levy taxes. In practice, however, this right is limited to matters which are not yet subject to taxation by another entity;
- from project-related grants: The German-speaking Community may receive grants from other bodies (e.g. from the European Union for Interreg projects) for certain projects (e.g. job-creation measures, cross-border tourism infrastructure);
- earmarked revenue for funds (variable appropriations).
The expenses budget sets the expenditure ceiling for a financial year. This ceiling must not be exceeded, which requires a budgetary adjustment by decree.
The budget of the German-speaking Community is divided into seven main organisational areas:
- OB 01: Parliament of the German-speaking Community
- OB 10: Government of the German-speaking Community
- OB 20: Ministry of the German-speaking Community
- OB 30: Education, employment and training
- OB 40: Youth, adult education, culture, sport, tourism
- OB 50: Health and social affairs
- OB 70: Infrastructures
The infrastructure plan, which is continuously updated by the Government, includes all current infrastructure projects of the budget year for which an application has been submitted and for which the Government has already made a commitment. Specifically, these are projects for which a commitment appropriation has already been provided in the current expenditure budget.
The so-called variable credits are earmarked for expenditure, which will be implemented through the budgetary funds. These credits may relate to both current expenditure and investment expenditure.
Unlike the allocated appropriations, the variable credits are not limited. This is due to the fact that, unlike general revenue, the financial resources of the budgetary funds available at the end of a financial year can be carried over to the next year, and the estimated variable credits of a budget year therefore evolve in line with the earmarked revenue actually recorded.