www.fs-rs.si / News / News / The Fiscal Council’s explanation concerning the published Assessment of fiscal and macroeconomic consequences of the Coalition Agreement on Cooperation within the Government of the Republic of Slovenia in the 2018–2022 term of office
Published: 09/26/2018

The Fiscal Council’s explanation concerning the published Assessment of fiscal and macroeconomic consequences of the Coalition Agreement on Cooperation within the Government of the Republic of Slovenia in the 2018–2022 term of office

Pursuant to the Fiscal Rule Act the Fiscal Council is an independent and autonomous body required to review compliance with the fiscal rules, thereby guaranteeing the conditions for long-term sustainability of public finance. The Fiscal Council is aware that the coalition agreement is not a budget document and also not necessarily a binding document. Nevertheless, it can serve as a base for the government’s economic and political decisions, including in the budget process. Given the experience to date and considering the experience of other countries, we believe that indicating the risks to the sustainability of public finances is most effective at the beginning of the budget preparation process.

The assessment of the coalition agreement by the Fiscal Council follows the good practices of independent fiscal institutions. As indicated in the assessment, the Netherlands Bureau for Economic Policy Analysis (CPB) has the longest tradition in this field; before the elections it evaluates economic sections of political parties’ platforms in terms of their macroeconomic and public finance impact, and also assesses the effects of the coalition agreement after the elections. The analyses of the usefulness of such practices indicate, inter alia, that they gradually contribute to political parties making more realistic promises and also keep the electorate better informed about the consequences of the measures envisaged. Interestingly enough, the initiative to assess election programs in the Netherlands was started by political parties themselves. Due to the favourable response by the general public, a circle of parties wishing to obtain an independent assessment of their political platforms has expanded over the years and brought about the need for the CPB to limit its assessments. Political platforms are also assessed in the USA (CBO) and Great Britain (IFS), though to a slightly lower scale; in some other countries (e.g. Latvia) attempts to increase the transparency of political party platforms are being made.

We have undertaken the assessment in a serious and responsible manner, bearing in mind the multifaceted uncertainties related to the assessment of the effects of the coalition agreement. Therefore, rather than producing a point estimate, the Fiscal Council provided its assessment based on different scenarios via intervals; it emphasised that the assessments are not forecasts of future trends but mere indicators of the risks that can materialise if the measures listed in the coalition agreement are implemented consistently. The assessment was published with the aim of contributing to greater transparency of such documents and raising the awareness of political stakeholders about their responsibility in drafting such documents. The Fiscal Council intends, within the available resources, to continue to draw attention to the risks that could affect the sustainability of public finances.

© Fiscal Council 2017 - 2019

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