General budget and approval dates

The general budget is the mainstay of any state, for it provides estimates of the revenues and expenditures as well as of the deficit and surplus rates and it crafts a general framework for the economic and financial policies. Given its importance, the devising and approval of the general budget have been assigned specific legal dates and deadlines in the Lebanese constitution.

According to Article 83 of the Lebanese Constitution, “..each year, at the beginning of the October session, the government shall submit to Parliament the general budget estimates of state expenditures and revenues for the following year. The draft budget shall be voted upon article by article.”

Article 32 stipulates that “..the second parliamentary session shall open on the first Tuesday following October 15; its meetings shall be reserved to the discussion of and voting on the budget before any other work. This session lasts until the end of the year.”

“If Parliament has not given a final decision on the draft budget estimates prior to the expiration of the session dedicated for budget examination, the President of the Republic, in coordination with the Prime Minister, shall immediately call the legislature into an extraordinary session that shall last until the end of January in order to continue the discussion of the budget. If, at the end of the extraordinary session, the budget estimates have not been finally settled, the Cabinet may then make a decision, on the basis of which a decree is issued by the President of the Republic giving effect to the draft budget in the form in which it was submitted to Parliament. The Cabinet may not exercise this right unless the draft budget was put before Parliament at least 15 days before the commencement of its session. During the said extraordinary session, taxes, charges, duties, imposts and other kinds of revenues shall continue to be collected as before. The budget of the previous year shall be adopted as a basis. To this must be added the permanent supplementary credits and from it must be deducted the permanent credits which have been dropped. The government shall fix the expenditures for the month of January according to the twelfth provision rule,” reads Article 86 of the Constitution.

From the above Articles, one may easily infer that the general budget is a fundamental task, highly prioritized by both the Cabinet and Parliament. Its approval before the beginning of each year is absolutely essential and any delay in passing the budget until after the end of January may jeopardize the state’s financial performance.

Date of approval of the budget

Table 1 illustrates the dates on which the general budget was passed between 1943 and 2005. This period has seen the approval of 59 budgets as follows:

• Due to civil war and the consequent disruption of the state’s efficiency following the division of political power between two governments, Lebanon had no budget between 1986 and 1989.
• Even under the most stable tenures, no budget was approved before the beginning of the fiscal year, which indicates levity in the tackling of financial matters.
• Of the total number of approved budgets, less than a half (26) were passed during the first two months of the year, in other words within the legal period. Those were approved in 1943, 1946, 1952, 1955, 1957, 1958, 1960 to 1970, 1972, 1976, 1994, 1995, 1996, 1998, 2000, 2002 and 2003.
• 23 budgets were passed during the first half of the year. Those were in 1944, 1945, 1947 to 1951, 1954, 1956, 1959, 1971, 1973, 1974, 1977 to 1980, 1982, 1983, 1984, 1997, 2001 and 2004.
• The approval of budgets in 1953, 1975, 1981, 1985, 1990 and 1991-seven in total- dragged on until the second half of the respective years.
• The budgets of 1992, 1993 and 2005 waited until the last month of the year or even the first of the year after to be ratified.
• During the post-Taif Accord period, between 1990 and 2013, the budget remained un-passed eight times. It was approved late four times, between the end of June and first of September. Three budgets were approved by the end of the year and nine budgets were not ratified until the first four months of the succeeding year. In short, most budgets (15) were either vetoed or passed after major delays.

Source: General budget laws

Estimated deficit vs. actual deficit

The post-Taif Accord budgets (1993- 2013)- whether approved or not passed- have all failed to make accurate estimates of the revenues and expenses. Throughout this period, the income yield fell short of the estimates- except in 2004 and 2005- and the expenses far exceeded the forecasts, which translated into higher deficit rates than those projected initially. These steep discrepancies have downplayed the role of the budget, for although it is true that budgeting is a “guess work”, the estimates provided should closely match the reality, rather than be mere unrealistic figures. Table 2 illustrates the difference between estimates and actual figures.

Source: Estimated revenue and expenses according to general budget laws and actual revenue and expenses according to budget accounts laws until 2003. (No state budgets or accounts were approved between 2006 and 2013)