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Thanks are due to Professor Niek Schoeman (University of Pretoria, South Africa), Jack Diamond and other colleagues in FAD, Kalpana Kochhar, Murray Petrie, and Chris Towe for helpful comments. The usual disclaimers apply.
Abedien and Biggs (1998, p. 231) provide a useful description of alternative measures in the South African context but do not suggest which indicator would be the best.
South Africa has yet to move to full accrual accounting in the public sector and is currently aiming to complete this reform by 2004.
For a detailed description of the different schools of thought on the importance of the budget deficit, see Jacobs (2000, pp. 16–53).
Authors such as Barro contested this viewpoint: see Rosen (1995) for a detailed description of Barro’s viewpoint.
This broader description of the conventional deficit is also measured on a cash basis (Robinson and Stella in Blejer and Cheasty, 1993).
The IMF mainly uses the conventional (“overall”) budget balance, especially in the context of an IMF program.
The values are 3.0 percent and 60.0 percent of GDP for budget deficit and the public debt to GDP ratio respectively.
It should, however, be noted that in New Zealand the combined financial statements of the government do not cover the whole of the public sector in gross terms. The government’s interest in state-owned enterprises and Crown entities (i.e., legally separate bodies that are owned or controlled by government and have no commercial objectives) has been consolidated on a net equity basis, i.e., the government’s equity in these bodies is an asset on the government’s balance sheet, but the gross revenues and expenditures of these bodies are not consolidated in the operating statement. Full line-by-line consolidation will be introduced in the 2002/03 Budget due to be presented in May 2002. This will have separate segment reporting of the different sub-sectors of the public sector.
Ibid (2000, pp. 112–116).
Ibid (2000, pp. 116–121).
Ibid (2000, pp. 149–155).
The project is managed by the Ministry of Finance is called “Vunlindlela.” At the moment it covers only National and Provincial Governments.