Government budget

A government budget is a document prepared by the government or other political entity presenting its anticipated revenues and proposed spending for the coming financial year.[1] In most parliamentary systems, the budget is presented to the lower house of the legislature and often requires approval of the legislature. The budget in itself does not appropriate funds for government programs, which requires additional legislative measures.

History

The financial crisis caused by the South Sea Bubble led to the presentation of the government budget under Sir Robert Walpole. Painting by Edward Matthew Ward.

The practice of presenting budgets and fiscal policy to parliament was initiated by Sir Robert Walpole in his position as Chancellor of the Exchequer, in an attempt to restore the confidence of the public after the chaos unleashed by the collapse of the South Sea Bubble in 1720.[2]

Thirteen years later, Walpole announced his fiscal plans to bring in an excise tax on the consumption of a variety of goods and services, such as wine and tobacco, and to lessen the taxation burden on the landed gentry. This provoked a wave of public outrage, including fierce denunciations from the Whig peer William Pulteney, who wrote a pamphlet entitled The budget opened, Or an answer to a pamphlet. Concerning the duties on wine and tobacco - the first time the word 'budget' was used in connection with the government's fiscal policies. The scheme was eventually rescinded.[3]

The institution of the annual account of the budget evolved into practice during the first half of the 18th century and had become well established by the 1760s; George Grenville introduced the Stamp Act in his 1764 budget speech to the House of Commons of Great Britain. [4]