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Fiscal discipline benefit management
Dace Kalsone, Dr.oec., LL.M.Fiscal discipline council secretary
64th Meeting of Directors General of the European Public Administration Network
Riga, 11 June 2015
Agenda
• Benefit management: crash course• From the euro introduction project to
continuous fiscal discipline• Fiscal council benefits• Fiscal discipline benefits
Benefit management importance (1/3)
• Benefit can be both quantitative and qualitative
• Benefit management consists of 3 main activities:
1• Benefit identification
2• Benefit management procedure
development
3• Benefit transfer
Why is it important?
• motivates to be responsible for changes
• ensures the provability of changes
• ensures common target for all stakeholders
• focuses on specific results
• proves return of investment
Source: Dr.sc.ing. Renāte Strazdiņa, E&Y
Benefit management process (2/3)
Identify benefits and indicators
• Create potential benefits longlist
• Link recommendations with benefits
• Agree on necessary indicators (quantitative or qualitative) for each sort of benefit
• Create benefit register• Define base value to
keep the track of progress
Tracing procedure and management
• Identify benefit holders and agree on management procedures
• Finalise possible benefit qualification and file benefit register
• Establish monitoring procedure
Overtaking benefits
• Identify quick-wins (benefits with immediate identification and fulfilment)
• Monitor changes• Control benefit
implementation• Integrate benefits into
everyday procedures• Transfer benefit chain to
the next benefit holder
DiagnoseIdentify DeliverCreate Maintain
Source: Dr.sc.ing. Renāte Strazdiņa, E&Y
Benefit management principles (3/3)
Source: Dr.sc.ing. Renāte Strazdiņa, E&Y
Real and measurable
• Benefits are clearly classified and linked to the results
• Benefits are real and reachable
• Identified financial and non-financial benefits
• Benefits are measurable (if possible)
Appointed the responsible executive
• Duties and obligations are facilitated with continuous benefit progress monitoring
• Benefits are gradually transferred from «monitoring phase» to the everyday activities
Ensured regular monitoring and control
• Benefits associated with risks are identified and minimised
• Activities oriented towards benefit creation and safeguarding
• Sustainability of benefits based on the involvement of interested parties during the whole benefit management life-cycle
Agenda
• Benefit management: crash course• From the euro introduction project to
continuous fiscal discipline• Fiscal council benefits• Fiscal discipline benefits
Red lines of Maastricht criteria: o 60% public debt and o 3% budget deficit
Fiscal discipline goes further:o Sustainable debt level*o Balanced budget
Euro benefits include fiscal discipline
* Let's talk about...public debt. European Parliament. 1/06/2015 http://europarltv.europa.eu/en/player.aspx?pid=933714b0-baad-42f3-b036-a4aa008c7e0f
Balanced budgettheory
-3% budget deficit, Maastricht red line
0% budget deficit
-0,5%
-1,0% if low debt
Space for structural reforms deviation
Source: EU Law on MTBF
Balanced budgetpractice (2013 EU MS)
-3% budget deficit, Maastricht red line
0% budget deficit
-0,5%
-1,0%
Source: EU Commission, 2015http://ec.europa.eu/economy_finance/eu/forecasts/2015_spring_forecast_en.htm
LV
PT
-1,5%
-2,0%
-2,5%ES
IT
FRIE UK
NL
BE
DECZ
BG
RO
PL
LT
EE FI
SE
MT
CY
HUSK
SI
AT
DK
CR
LU
Fiscal council – independent institute
Institution acting under the Fiscal discipline law (Directive 2011/85)
Monitors decisions that significantly impact fiscal development
Provides an independent view on any issue concerning state finance
In Latvia – since 1/01/2014
Fiscal council – independent institute
COUNCIL
SECRETARIAT
CHAIR DEPUTY CHAIR MEMBER MEMBER MEMBER MEMBER
SECRETARY FISCAL EXPERT
MACRO EXPERT ECONOMIST
VISION
RESEARCH
Fiscal discipline possible benefits
Spending efficiency: zero-base budget every year!
Positive communication: paying taxes is good!
Sustainable budgeting principles: at home, at enterprise, at municipilaty, at state level
Thank You for Your attention!
Your questions?
www: http://fiscalcouncil.lv Twitter: @FiskalapadomeFacebook: fiskalapadome