Government budget
A projection of government revenues and expenditures for a fiscal year.
Wikipedia / Wikimedia Commons
A government budget is a plan estimating a government’s income and spending over a set period, typically called a fiscal year. Income mainly comes from taxes—such as those on income, corporations, inheritance, and imports—while spending covers areas like healthcare, education, defense, infrastructure, and social benefits. The central government or another political body prepares this budget. In most parliamentary systems, it is presented to the legislature and usually needs its approval. Through this budget, the government carries out its economic policies and pursues its program priorities. Once approved, individual ministries and institutions manage the funds allocated to their specific chapters. State budget revenues largely consist of taxes, customs duties, fees, and other sources. Expenditures fund state activities required by law or the constitution. The budget itself, once approved by the legislature, typically authorizes expenditures for specific programs without requiring separate additional legislative measures for each allocation.
The first credible budgets—statutory, typically one-year plans auditable by parliament—appeared in England in the late 17th century, with France in 1830, Denmark, Piedmont, and Prussia in 1848, Portugal in 1851, Sweden in 1866, Austria in 1867, and Spain in 1876. These budgets had two main effects: they made parliaments more willing to approve new taxes, and they boosted wartime military spending, increasing the chance of victory. The practice of presenting budgets and fiscal policy to parliament began with Sir Robert Walpole as Chancellor of the Exchequer, aiming to restore public confidence after the South Sea Bubble collapse in 1720. Thirteen years later, Walpole announced plans for an excise tax on goods like wine and tobacco, while reducing taxes on the landed gentry. This sparked public outrage, including fierce criticism from Whig peer William Pulteney, who wrote a pamphlet titled *The budget opened, Or an answer to a pamphlet. Concerning the duties on wine and tobacco*—the first use of the word “budget” in connection with government fiscal policy. The proposed Excise Bill was eventually withdrawn. The annual budget account became standard practice during the first half of the 18th century and was well established by the 1760s; George Grenville introduced the Stamp Act in his 1764 budget speech to the House of
- first_credible_budget
- England, late 17th century
- first_use_of_term_budget
- 1733, by William Pulteney
- first_modern_budget_country
- England (late 17th century)
- key_legislation
- Bill of Rights 1689 (required parliamentary approval for taxes; annual budgeting developed later through Mutiny Acts)
- budget_type_examples
- National, State, Plan, Performance
Lore & Background
The practice of presenting budgets to parliament predates Sir Robert Walpole, with earlier examples in England such as parliamentary control over supply following the 1689 Bill of Rights. However, Walpole, as Chancellor of the Exchequer, played a key role in formalizing the process after the South Sea Bubble collapse in 1720. In 1733, Walpole announced an excise tax on wine and tobacco, provoking public outrage. William Pulteney wrote a pamphlet titled 'The budget opened', first using the word 'budget' for fiscal policy. The Excise Bill was eventually rescinded. The annual budget became well established by the 1760s; George Grenville introduced the Stamp Act in his 1764 budget speech to the House of Commons.
Reader's Guide
The government budget system was historically established as a way for the legislature to control and organize the financial activities of the executive. Credible budgets, auditable by parliament, first appeared in the Netherlands in 1572 and later in England in 1689, France in 1830, and other countries. These budgets made parliament more likely to approve new taxation and enhanced wartime military spending. The budget is a product of both government administration and political democratization, emerging from the struggle between the bourgeoisie and feudal ruling class. It serves as a mechanism for taxpayers and their representatives to control government finances, ensuring revenues and expenditures align with public interests. The budget determines the proportion and structure of resource allocation in society and is the basis of representative politics, with democratic finance as its core value.
Did You Know?
- The word 'budget' was first used in connection with government fiscal policies in a 1733 pamphlet by William Pulteney.
- Credible budgets were first introduced in the Netherlands in 1572, predating England's 1689 budget by over a century.
- The Bill of Rights 1689 required that taxes be approved by Parliament, but the practice of annual budgeting developed later through the Mutiny Acts and tradition, not the Bill itself.
- England's modern budget is more commonly associated with the Glorious Revolution of 1688 and the Bill of Rights 1689, not the contested 'bourgeois revolution of 1640'.
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