Grzegorz W. Kolodko. Transformation, Integration. and Globalization Economic Research. Kozminski University, Warsaw.

Transcription

1 Grzegorz W. Kolodko Transformation, Integration and Globalization Economic Research Kozminski University, Warsaw

2 in transition economies The case of Poland

3 Off-budget international aspect: it refers to all outcomes, incomes and public financial processes which don t belong to the budget system Off-budget units international aspect: the institutions (organizations) engaged into off-budget operations, which have their own structure and often are independent, or quasi-independent, on the basis of specific legal acts 3

4 The system of the off-budget entities in Poland consists of: budgetary establishments auxiliary units of budgetary entities own revenues accounts motivations funds appropriated funds (central government and local authorities) These off-budget entities are in a broad way connected with public budgets. 4

5 Off-budget in broad understanding embraces also state agencies, which are regulated by separate acts and: are legal persons realize state tasks are supervised by proper minister financial plans are being attached to the State Budget and hence scrutinized by the Parliament 5

6 Main rules: Off-budget functioning within the national/state budget system financial plans are attached to the budget cover the cost of its activity by their own incomes the rules concerning finance policy of extra-budgetary units in Poland are set in the Public Finance Act of June 30 th, 2005 moreover financial policy of appropriated funds is defined by separate acts 6

7 Advantages: Off-budget enable flexibility of public means usage enable to avoid competition for budget means each year are useful in social areas enhance activity and increase efficiency of public means utilization 7

8 Threats: pressure to create units which independently run a business lack of accountability for financial outcome can cause a danger of abuse mistaken decisions and policy errors are done at the costs of the state budget 8

9 Budgetary establishments (I): independent, but not being legal person, state or council organizational unit collect payments for its services cover its expenses with own revenues financial plan is the base of financial policy and embraces incomes, among others budget subsidy, costs, the level of turnover, the level of amount dues and obligations at the beginning and at the end of the period and settlements with the budget 9

10 Connections of budgetary establishments with the budget simplified version (II): Budget subsidy payments Budgetary establishments 10

11 Budgetary establishments (III): can be granted subject subsidies on the basis of separate acts can receive entity subsidies or purposeful subsidies in order to co-finance investments newly created budgetary establishments can be granted single budget subsidy devoted to its first equipment in financial means subsidies granted to the budgetary establishments cannot exceed 50 percent of its activity costs are obliged to pay to the budget the surplus of turnover which is established at the end of settlement period 11

12 Off-budget Incomes and costs of state budgetary establishments in Incomes of budgetary establishments (000 PLN) Costs of budgetary establishments (000 PLN) 12

13 Incomes and costs of local authorities budgetary establishments in Incomes of local authorities budgetary establishments (000 PLN) Costs of local authorities budgetary establishments (000 PLN) 13

14 Number of state budgetary establishments

15 Number of local authorities budgetary establishments

16 Employment in budgetary establishments in 2007 Item State Local authorities Employment (full-time)

17 From Shock without Therapy to Therapy without Shocks GDP growth (left scale) and unemployment rate (right scale) in Poland, Strategy for Poland 20 7 Shock "therapy" 2,6 3,8 5,2 7,0 6,2 7,1 5 4,5 4,2 1,1 0,6 Public Finance Reform Program 5,3 3,8 3,5 1,9 6,1 6,5 4, I poł 2002 II poł vercooling EU memberrship ,

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20 Thank you

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23 Auxiliary units of budgetary entities (I): not being legal person, state or council organizational unit, separated from the budgetary entity part of its basic activity or side activity in terms of finance and organization, financial plan is the base of financial policy and embraces incomes, among others budget subsidies, costs, cash flow statement, the level of turnover, the level of amount dues and obligations at the beginning and at the end of the period and settlements with the budget, collect payments for its services, cover its expenses with own revenues. 23

24 Connections of auxiliary units of budgetary entities with the budget simplifies version (II): Budget Subsidies Budgetary entity Income Auxiliary units of budgetary entities 24

25 Auxiliary units of budgetary entities (III): sell services to its budgetary entities with no margin (profit), can be granted subject subsidies, newly created auxiliary unit of budgetary entities can be granted budget subsidy devoted to its first equipment in financial means, are obliged to pay into the budget half of its profit. 25

26 Incomes and costs of state auxiliary units of budgetary entities in Incomes of state auxiliary units of budgetary entities (000 PLN) Costs of state auxiliary units of budgetary entities (000 PLN) 26

27 Incomes and costs of local authorities auxiliary units of budgetary entities in Incomes of local authorities state auxiliary units of budgetary entities (000 PLN) Costs of local authorities state auxiliary units of budgetary entities (000 PLN) 27

28 Amount of state auxiliary units of budgetary entities: Amount

29 Employment in auxiliary units of budgetary entities in 2007 Item State Local authority Employment (full-time)

30 Separated own revenues account (I): budgetary entities, which are obtaining revenues from defined sources, can accumulate them on separated own revenue account, means can be accumulated on this account among others from the following revenues: payments for making tender documents available, inheritances, legacies, donations in form of cash, which are given to budgetary entities, compensations and payments for lost or damaged property which is managed or used by budgetary entity, other receipts and payments which are indicated in Public Finance Act or resolution of local authorities, own revenues can be devoted to financing expenditures connected with obtaining revenues by budgetary entity and to other expenditures, 30

31 Separated own revenues account (II): decision concerning creation of own revenues account is made by managers of budgetary entities, entitlement of budgetary entities is connected with revenues which are occasional and with revenues which usually cause generation of additional costs, own revenues together with interests cannot be devoted to finance personal expenditures, except additional salary of police and Internal Revenue Service, own revenues from each source has strictly defined destination. 31

32 Incomes and expenditures of state separated own revenues account in Incomes of state separated own revenues account (000 PLN) Expenditures of state separated own revenues account (000 PLN) 32

33 Incomes and expenditures of local authority separated own revenues account in Incomes of local authority separated own revenues account (000 PLN) Expenditures of local authority separated own revenues account (000 PLN) 33

34 Motivation funds: Off-budget financial means accumulated by state budgetary entities on separated bank accounts, from the part of budget incomes which are obtained from forfeiture of property or financial benefits coming from disclosure of crimes and offences against property and treasury crimes and treasury offences, devoted to rewards for employees, soldiers and officers who are responsible for creation budget incomes which are mentioned above. Motivation funds are not appropriated funds which are defined in Public Finance Act. 34

35 Incomes and expenditures of motivation funds in * Incomes of motivation funds (000 PLN) Expenditures of motivation funds (000 PLN) * Incomes of motivation funds were increased by part of incomes of liquidated special funds 35

36 Appropriated funds (state and council) (I): are set up on the basis of legal act, incomes come from public means, expenditures are devoted to strictly defined tasks, can act as a legal entity or constitute separate bank account which is managed by authority indicated in the act of creation. 36

37 Appropriated funds (state and council) (II): the base of financial policy is yearly financial plan, expenditures general can be made within financial means, which embrace current incomes, including budget subsidies or local authority subsidies and other means obtained in previous periods, can incur credits and debts, however it has to be stated in the act which creates appropriated fund.

38 Incomes and expenditures of state appropriated funds in Incomes of state appropriated funds (000 PLN) Costs of state appropriated funds (000 PLN) 38

39 Incomes and expenditures of local authority appropriated funds in Incomes of local authority appropriated funds (000 PLN) Expenditures of local authority appropriated funds (000 PLN) 39

40 Amount of appropriated funds, whose financial plans are being attached to State Budget: Amount