Yesterday, we learned the latest details from the coalition government concerning their budget plans for the next year. But why publish an annual budget?
My suggestion is not that there should lack a budget. Clearly, budgets are hugely important. Additionally, it is easy to see the attraction of an annual budget. Often households assess their expenses and holiday plans based around expected annual income as the expected income would be set for about a year -- there would be no need to make any major reassessments provided employment remained steady.
However, governments are unlike households. The amount of income (via taxes, etc.) does not arrive all at once, but often spread out and it varies month to month. Expenditures are also in flux. While some prediction can and should be made about the year ahead (as well as the longer term), there may be good reason to recommend government budgets every six months. This would better account for the realities and fluctuations in income and expenditures. If banking and finance groups meet more regularly to reassess priorities and interest rates, then why should government claim just one budget for the year? A day is a long time in politics; a year is almost an eternity.
Government should publish a new budget every six months. Whether or not it will is another story...