Citizens’ Budget: Simplifying financial information for the public

Published on: 21/01/2016
Document

Portugal’s first Citizens’ Budget was published in 2014 with the purpose of streamlining the messages carried by the annual Public Budget. The Portuguese government maintained the project in 2015, developing a structure within the Ministry of Finance to communicate the most relevant information.

Knowing where public money comes from, and where it goes, isn’t always easy. Government budgets are complex documents with lots of pages, tables and graphics, written in technical language that many ordinary citizens find difficult to understand.

The Open Budget Initiative carried out in 2010  showed that Portugal is in some respects one of the weakest countries in providing information that helps civil society and the public understand and monitor budgets. The international study went on to suggest that the government should create appropriate mechanisms for public participation in budget processes. And so it did.

 

The Portuguese government has been seeking to implement better transparency and open government measures in a broad strategy developed over the last four years. As part of this strategy it began the project to develop a Citizens’ Budget as a way to increase the transparency of public finances and fiscal policy. This was one of several initiatives to increase both the amount and the quality of information on public finances, which is considered an important element in fostering the quality of democracy in Portugal.

The first step was made through a cooperation with the Instituto de Políticas Públicas Thomas Jefferson-Correia da Serra (IPP) in 2014. The IPP worked closely with the Ministry of Finance with the main goal of providing a Citizens’ Budget that was easy to read and understand. Published several months after the 2014 Public Budget, the document was based on the same information presented to Parliament and approved in October 2013. It summarised the main points of the budget in just 30 pages.

Fostering involvement

The project proved its usefulness in communicating fiscal policy and fostering involvement in the political process. This was especially relevant because Portugal was going through a difficult financial period at the time, with widespread cuts in public expenditure accompanied by tax increases. The goal for 2015 was to maintain the budget deficit below 3 percent of gross domestic product and escape the European Union’s  procedure for the control of excessive deficits.

For the 2015 Public Budget, the government decided to repeat the Citizens’ Budget but to centre all the work within the Ministry of Finance. The result was a PDF document of 27 pages plus an interactive form that allows citizens to experiment with the budget by manipulating the income and expenditure  of the Central Administration and some sub-sectors, including Social Security and Local Administrations.

 

Policy Context

The Portuguese government has adopted a broad strategy to modernise and simplify the country’s public services. The programme has been carried out since 1986 across various platforms and public organizations, with the aim of building a citizen-oriented public administration. One of its main goals is to provide transparent and straightforward information to the public, so as to increase citizens’ participation in public decisions.

The new Citizens’ Budget is not simply a resumé of the Public Budget; it also has a teaching role, showing citizens how to read the Public Budget document to find specific information that is important to them.

The documents were published online and publicised largely through various government Internet services as well as the Portuguese media.

The Citizens’ Budget uses interoperable formats and open standards as mandated by the government some years ago.

 

Description of target users and groups

The main targets of the project are Portuguese citizens, especially those seeking to understand the main points of the Public Budget, and how revenues are collected and spent. How much of the budget goes on human resources? What does the government pay in interest and other charges related to public debt? And what is the cost of services and product acquisitions? The Citizens’ Budget aims to answer questions like these.

The document’s “Dashboard” provides insights to the main areas of the Public Budget, but the Citizens’ Budget is not simply a resumé of the politicians’ document. It also teaches citizens how to read the main budget document to find specific information.

 

Description of the way to implement the initiative

In its first phase, in 2014, the Citizens’ Budget was developed in partnership with the Instituto de Políticas Públicas Thomas Jefferson-Correia da Serra (IPP), which was responsible for the technical preparation and monitoring of the document. The IPP is a well-respected organization that studies and implements open budget initiatives, promoting research, disseminating knowledge and encouraging debate on public policies. For this second year the work has instead been centralised inside the Ministry of Finance, which produced the 2015 document and made it available online to all citizens.  

Main results, benefits and impacts

The idea of a Citizens’ Budget has been implemented successfully in several European countries. The United Kingdom, Sweden and the Netherlands are some of the examples the Portuguese government used to define the best implementation for its own project. In each case, they found that a Citizens’ Budget serves two different objectives: on one hand holding politicians accountable, and on the other getting citizens involved in the political process.

 

The Portuguese Citizens’ Budget provides accessible and objective information about:

  1. The state budget process and its components.
  2. How the government anticipated that the economy would develop in 2015, as a background to its budgetary choices.
  3. Objectives for dealing with the budget deficit and public debt, as well as a set of other key indicators.
  4. Revenues and expenses planned for 2015.
  5. A summary of the main measures of budgetary policy in terms of revenues and expenses.

The direct effect of a Citizens’ Budget

Summaries, tables and graphics are used to explain the priorities and decisions implied in budgetary policy, without over-simplification.

The communication of budget priorities is crucial for citizens who need to understand how the government intends to get its revenue, where this money will be spent, and how the government expects to reach its goals for dealing with the budget deficit and public debt.

The direct effect of a Citizens’ Budget is almost impossible to measure. However, the project was so well received by the public and the media that the government decided to repeat and improve it for a second year.

In a general survey led by the International Budget Partnership in 2015, Portugal ranked 21st in the world – the same position it held in 2012. However, the country rose from 62 to 64 points in its score on the three key areas covered by the survey. The report mentions that part of this increase is due to the publication of the Citizens’ Budget, plus the fact that Portugal has made the full Public Budget easier to understand .

The International Budget Partnership report lists a series of recommendations that should be prioritised to improve transparency in Portugal. These include the publication of a mid-year review, and improvements in how the Citizens’ Budget classifies revenue and expenditure in future years.

It is still unclear whether the new government elected at the end of 2015 will maintain the same kind of initiative for its first Public Budget in 2016.

 

Return on investment

Return on investment: Not applicable / Not available

Categorisation

Type of document
General case study