Balance of revenue and expenditure

  • ESA financing balance of Flemish Authorities -654 million euro

    In 2018, the ESA financing balance (INA) was -646 million euro. The ESA financial balance as measured by the High Council of Finance (HCF) is used by the Flemish Authorities as a yardstick. It amounted to -654 million euro in 2018. 

    According to the Institute of National Accounts (INA), the ESA financing balance is equal to the difference between ESA revenue and ESA expenditure, with the exclusion of new loans or leasings, repayments of loans and leasing debts and the investments in and the sale of financial fixed assets. We call this the ESA financing balance (INA).

    In the aftermath of the 6th state reform, the ESA financing balance (HCF) has been calculated according to the method of the High Council of Finance (HCF).

    Both variants of the ESA financing balance were equal between 2010 and 2014. In 2010 there was a balance of -1,523 million euro. That balance rose to 17 million euro in 2012, followed by a decrease to -718 million euro in 2014.

    In 2015, the ESA financial balance (INA) dropped to -3,377 million euro, subsequently rose to 1,401 million euro in 2017, but decreased dramatically to -646 million euro in 2018. 

    The ESA financing balance (HCF) rose steadily from 2014 onwards to amount to 791 million euro in 2018, but again dropped well below zero in 2018.

    The large difference between the two variants from 2015 onwards is due to the method used for the calculation of the surcharges on income tax which  became a competence of the Flemish Authorities after the 6th state reform. The HCF method implies a more balanced distribution of the surcharges over the years from 2015 onwards and consequently a flatter evolution of the ESA financing balance (HCF).

  • Budgetary result and ESA financing balance of Flemish municipal authorities again negative

    With a 512 million euro deficit, the budgetary result of the Flemish municipal authorities (including the Antwerp districts) was strongly negative in 2018.

    The municipal authorities use the budgetary result of the financial year as a yardstick for their policy. The budgetary result is the difference between all revenue and all expenditure for the financial year.

    The budgetary result decreased from 229 million euro in 2010 to almost -700 million euro in 2014. In 2015, it increased to 1,035 million euro, but it declined again to 210 million euro in 2016, and further to the negative result in 2018.

    The Institute of National Accounts (INA) also calculates the ESA financing balance for the Flemish municipal authorities. The ESA financing balance is equal to the budgetary result, with the exclusion of the financial capital transactions, which include the borrowing and repaying of loans. The yardstick can be used for a comparison with other entities.

    In the 2010 and 2013 the ESA financing balance followed the evolution of the budgetary result, but at a lower level. After that, the differences became very large. In 2018, the ESA financing balance was negative and amounted to almost -400 million euro. The financing balance dropped from -37 million euro in 2010 to -842 million euro in 2012. It then rose to 506 million euro in 2017, but again dropped sharply to the negative amount in 2018.

  • Budgetary result of other local authorities at 81 million euro

    The budgetary result of the local authorities other than the municipal authorities stood at 81 million euro in 2018. These include the autonomous municipal companies , the public centres for social welfare (PCSW), PCSW associations, provincial authorities and autonomous provincial companies.

    The figures on the budgetary result of the other local authorities are only available from 2014 onwards. The budgetary result rose from 118 million euro in 2014 to nearly 219 million euro in 2015. In 2016, it dropped to almost 40 million euro, but rose again to 81 million in 2017 and 2018.

    In 2018, the ESA financing balance of the local authorities measured by the Institute for National Accounts (INA) was negative and amounted to almost -116 million euro. The ESA financing balance rose from over 19 million euro in 2014 to almost 175 million in 2016, followed by a sharp decline to 54 million euro in 2017 and to -116 million euro in 2018.

    In 2014, the ESA financing balance was nearly 99 million euro lower than the budgetary result and in 2015 almost 101 million euro. In 2016, the ESA financing balance was 135 million euro higher than the budgetary result, but in 2018 it was once again nearly 197 euro lower.

  • Large differences between other local authorities

    There are large differences in the budgetary results between the other local authorities.

    In 2018, the budgetary result of the autonomous municipal companies  stood at 25 million euro. In 2014 the result amounted to more than 9 million euro, and rose to 51 million in 2015. In 2016 it dropped to almost -30 million euro, but then rose to a positive amount again in 2018.

    In 2018 the public centres for social welfare (PCSW) had a positive budgetary result of more than 16 million euro, compared to almost 51 million in 2017, 17 million in 2016, 150 million in 2015 and 120 million euro in 2014.

    There was an increase for the PCSW associations from nearly 4 million euro in 2014 to more than 47 million in 2016, followed by a sharp decline to 12 million euro in 2017 and a sharp rise to 64 million in 2018.

    The budgetary result of the provincial authorities rose from -22 million euro in 2014 to nearly 1.4 million in 2016. The balance then decreased to -28 million euro in 2018.

    For the autonomous provincial companies  the budgetary result rose from 6.6 million euro in 2014 to more than 16 million euro in 2015, followed by a decrease to 3 million euro in 2018.

  • Positive budgetary result for 98 municipal authorities

    The budgetary result of the municipal authorities in euro per inhabitant varies considerably from one municipality to another. No clear pattern can be identified in the differences.

    In 2018, 98 municipal authorities had a positive budgetary result and 210 municipalities had a negative result.

    In 10 municipalities there was a negative result lower than -400 euro per inhabitant: Spiere-Helkijn, Begijnendijk, Nieuwpoort, Wielsbeke, Mortsel, Lille, Staden, Kontich, Rumst and Boortmeerbeek.
    In 39 municipalities (including the centre cities Leuven and Antwerp) the result was between -200 and -400 euro per inhabitant and in 161 municipalities (including the centre cities of Roeselare, Genk, Ostend, Sint-Niklaas, Mechelen and Hasselt) it was between 0 and -200 euro per inhabitant.

    In 88 municipalities (including the centre cities Ghent, Turnhout, Aalst, Kortrijk and Bruges), there was a positive budgetary result of 0 to 200 euro per inhabitant and in 10 municipalities the result was higher than 200 euro. The budgetary result amounted to more than 400 euro per inhabitant in the municipalities of Sint-Genesius-Rode (408 euro), Kraainem (428 euro) and Machelen (436 euro).

Sources

Flemish Authorities
Department of Finance and Budget: Website - ESA Financial Balance
Institute of National Accounts (INA): Website
National Bank of Belgium (NBB): Database Public Finance

Local authorities
Agency for Home Affairs (ADA): BBC - Concepts - Website
Institute of National Accounts (INA): Website

 

Definitions

ESA financing balance (INA): the difference between ESA revenue and ESA expenditure, with the exception of:
-
loans and repayments of debt,
credit provision and participations,
internal flows: revenue from and expenditure to the institutions to be consolidated.

ESA financing balance (HCF): variant of the ESA financing balance calculated according to the method of the High Council of Finance (HCF method). 
The HCF method no longer follows the rhythm of the registration and processing of tax files of the taxpayer person/household. It is based on a balanced offsetting of advances, pre-financing and amounts received. Consequently, the surcharges on personal income taxwere transferred to the Flemish Authorities after the 6th state reform, are spread equally over the years. The HFC method consequently leads to a more continuous evolution of the ESA financing balance (HCF).

The budgetary result of the financial year of the local authorities: the difference between all revenue (operating revenue, investment revenue and other revenue) and all expenditure (operating expenditure, investment expenditure and other expenditure) for the financial year. The balance of the previous financial years is not taken into account.

 

Publication date

21 November 2019

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