PUBLIC FINANCE Ing. David Slavata, Ph.D.

PUBLIC FINANCE The basic three principals of public finance  Irretrievability princip nenávratnosti  No ekvivalence princip neekvivalence  unwillingness princip nedobrovolnosti

THE PUBLIC BUDGET Public budget is a time limited financial plan It is a financial instrument: (1) to cover basic functions, needs and aims of state, state bodies and self governance institutions. (2) of public policy. The budget must be connected with budgetary prognosis.

FUNTIONS OF PUBLIC BUDGETS Allocation - the public goods are provided and covered by the public finance. Stability it is a macroeconomic instrument - it supports economic growth, employement, reduces of inflations, stabilise of payement balance (the samples: support of selected legal bodies,tax discounts, support of science…etc.) Distribution the revenues and pensions are distributed through public budgets.

PUBLIC BUDGET AS ACCOUNTANT BALANCE The budget must be compiled as balanced R = E Surplus budget – (R > E) the revenues are planned higher comparing to expenses. The surplus is used as payement of debts from previous years. Deficient budget (R<E ) the expenses are planned higher comparing to revenues. The deficit is covered from financial reserve or by loans. The budget is flow quantity – during the budgetary period the payements are comming and the expebnses must be covered. The budget is dividet into common and capital parts.

TREND OF REVENUES AND EXPENSES OF STATE BUDGET

BUDGETARY SYSTEM  The system of public budgets (state budget and budgets of self government institutions)  Extra-budgetary public funds (state funds, health insurance, social insurance funds)  Budgets of public nonprofit institutions (state companies, alowance institutions)

Budgetary System Public budgets State budget Budgets of Regions Municipal budgetsí Budgets of public institutions Extra-budgetary public funds State funds, funds of Regions, funds of municipalities Funds of public health insurance Specific funds, Transformation funds

HIERARCHY OF PUBLIC BUDGETS Supra national Central budget (state budget) Budgets of self Governances Budgets of Publicly owned companies and non profit institutions

BUDGET STRUCTURE The special acts adjust the structure of state budget and budgets of self governances. It sorts into the specific kinds. The sorts of structure: -the point of liability (liability of ministries) -the point of kind (wages, investments…) -the point of branch (environment, defence…)

STATE BUDGET The 77% of all public expenses goes through state budget. Revenues Irretrievable – tax, nontax, capital, incoming transferes Regressive – investments, credits, emissions of state bonds Expenses Irretrivable – allocation (wages, materiál expenses), transfers, capital expense Regressive – giving the loans with the credit, payements of state bonds

TAX REVENUES The tax revenues forms more than 50% of all revenues. Direct taxes – income taxes, property taxes Undirect taxes – VAT, excise duty Social Insurance

REVENUES FROM THE POINT OF RIABILITY 2014 IN MLD. KČ Ministry of Social Affairs525,2 General Treasury Administration144,1 Ministry of Education137,3 State Debt65,8 Ministry of Interior53,7 Ministry of Agriculture52,2 Ministry of Transport43,9

BUDGETARY PROCES