How ordinary citizens can analyse National Budgets

Filed under: Business,Latest News,Special Comments |

By Dr Lubinda Haabazoka

Many people normally ask themselves how is the budget? A lot of analysts will write their assessments year in year out of the budget skewed towards their biasses.

To answer yourselves on the budget, here are some guidelines. You can analyse the budget yourself at home as a DIY.

When analysing the budget we look at the following:

  1. Direct effects i.e how the budget changes the behaviour of direct beneficiaries

If say you are a security guard, how do you stand to gain from the budget? How much has been allocated to you in the budget? The allocation can come in form of salary tax cuts or industry specific incentives that will increase disposable income for your company which will likely trigger a pay rise for example.

  1. Indirect effects I.e how the budget impact on direct beneficiaries change the behaviour of related groups (trickle down effect)

From the budget allocations or some tax changes that affect you as a security guard or the industry in which you operate, how much of that will you pass on to groups that depend on you? It can be the extended family, a marketeer who will benefit from salary increment as you buy more goods from them etc.

  1. Macroeconomic effects I.e how the budget affects macroeconomic fundamentals.

This looks at how budget measures will help in employment creation, maintaining a stable exchange rate, low interest rates, low inflation rates and above all livelihood improvement of citizens.

So without looking at analysis that are mostly biased to what other people think is important, replace the security guard in the example with the position you are in. If you are a farmer, civil servant, lawyer, un employed, retiree how do you benefit directly, indirectly or through the macroeconomic environment.



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