1. Executive Training Course Costing with the Rapid Assessment Protocol Phnom Penh, 13 & 14 Nov 2012 Social Protection and Fiscal Space

2. What is fiscal space A Definition: Fiscal space = The availability of budgetary room that allows a government to provide resource for a desired purpose without any prejudice to the sustainability of its financial position. (Peter Heller, IMF) Fiscal sustainability means: Capacity is ensured to finance over the medium to long term all expenditure requirements and to service the national debt.

3. Government financing Government Revenues Domestic Revenues - Tax revenues (direct & indirect) - Non-tax revenues (visa fees etc.) - Seignorage revenues - Asset sales (e.g. land concessions, SOEs) - Other (e.g. natural resources) Financing Revenues - Domestic borrowing - Foreign Loans - Foreign Grants Government Expenditures Current Expenditures Capital Expenditures

4. Fiscal Space How to create fiscal space? 1.Generate additional revenues - Increase tax rate - Introduce new taxes - Improve revenue collection - Other (e.g. privatize SOEs) 2.Reduce or reallocate spending 3.Through loans

5. Fiscal space Tax Revenues to GDP ratio

6. Fiscal space Projected Revenue/GDP ratio

7. Fiscal space Project Government Revenues (in 2005 Riels)

8. Fiscal Space New Fiscal Space to be created in Cambodia Many competing spending priorities - Infrastructure development - Remuneration of Civil Servants - Education and Health - Etc. No comprehensive medium-term expenditure framework (MTEF) But medium-term sectoral budget frameworks for priority sectors (health, education, etc.)