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On the State Budget

Find out in detail the context and main guidelines of the document that annually dictates the country's political decisions.

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Historical Oddities

The concept of a State Budget is fairly ancient and has experienced a number of changes over the course of history. While there are many perspectives and contexts to establish its origin, almost all of them connect the idea of a State Budget to the people's wish to have a more active role in public affairs, such as taxes levied and how public money is spent.

Added to this, there are also some interesting oddities. From the connection to shipbuilding to the American and French Revolutions, references to the State Budget throughout history are not difficult to find.

The connection to shipbuilding

Originating from the Latin word “orçare”, the meaning we attribute today to the idea of a State Budget also has many of its origins in the act of outlining the construction of a ship, a very important activity in history.

The American Revolution

Throughout history, references to building the common good in a more participatory way are frequent. One of the best known expressions is the "no to taxes without representation" of the American Revolution.

The French Revolution

The 1789 French Revolution was also tied to people's willingness to participate in decisions on public finances. This notion is clearly reflected in the "Declaration of the Rights of Man and of the Citizen.

The Budget and the Constitution

Submitted in the form of a law and approved by the Assembly of the Republic, the State Budget is today a cornerstone of democracy and the rule of law.

ARTICLE 105

Budget

The State Budget contains:

A breakdown of the State's revenue and expenditure, including those of autonomous funds and services;

The social security budget.

The Budget is drawn up in agreement with the broad planning options and taking account of obligations arising from law or contract.

The Budget must be unitary and specify expenditure according to the respective organic and functional classification, in such a way as to prevent the emergence of covert appropriations and funds, and may also be structured by programmes.

The Budget must provide for the revenue needed to cover expenditure, and the law must establish the rules governing its implementation, the conditions governing the resort to public credit and the criteria governing the changes which, during implementation, may be made by the Government to the organic classification headings under each budgetary programme approved by the Assembly of the Republic, with a view to its full implementation.

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Definition, scope and roles

Every year, the government submits a document to the Assembly of the Republic for approval, setting out the expenditure and income of the Central Administration and Social Security, as well as a report with comprehensive information for the entire Public Administration for the following year, together with other documents that also contain specific policy measures to be implemented.

The set of these documents (Law, Maps and Report) is called the State Budget. It has three essential roles for the management of Portuguese public money, and they are: political, economic and legal.

Politics

It stands for the political priorities set out in the government's programme, as passed by the voters and discussed in the Assembly of the Republic.

Economic

It defines the management of public money, establishing the expenses to be carried out for the implementation of policies and forecasting the necessary revenue for this purpose.

Legal

The Budget adopts the form of a law and sets out the financial powers of the Public Administration for the budget period, i.e., the following year.

What does the budget contain?

The State Budget includes three key documents: the State Budget Law, the Descriptive Report and the Forecast Maps. All of these carry out a vital mission for the rigorous and organised management of national finances, and are subject to scrutiny and analysis by the different democratic institutions.

All documents, with variable levels of detail, combine not only analytical information related to the budget, but also the different strategic and political definitions that underpin it..

The State Budget Proposal contains:

Legislation for the application of the Budget

Budget programs and sectorial public policies

Numerical forecast tables

Analysis of fiscal risks

Expenses and Revenue Forecasts for Public Administrations

Budget policy and strategy

Legislation for the application of the Budget
Budget programs and sectorial public policies
Numerical forecast tables
Analysis of fiscal risks
Expenses and Revenue Forecasts for Public Administrations
Budget policy and strategy

Appreciation and voting by the Assembly of the Republic

After a series of analyses and discussions, the budget is voted on as a whole by the Assembly of the Republic and approved.

State Budget Law

Promulgation by the President of the Republic

After being approved by the Assembly of the Republic, the State Budget Law and the Legal Maps are analyzed and promulgated by the President of the Republic.

Know more about the budget cycle

One budget, several dimensions

Often, the significance and scope of the State Budget, and all the documents that comprise it, can go unnoticed. Written into the Portuguese Constitution as a key component of governance under the Rule of Law, the State Budget brings together, in different ways, the financial planning of the country's different administrative levels.

As such, some concepts usually used when talking about the State Budget need to be explained, as well as the administrative dimension and range to which they refer.

When the State Budget speaks of...

Central Administration

These are the expenses and revenues of all the entities under the government's supervision (Ministries), excluding Social Security.

For example: General Directorates, Public Institutes, State Public Companies, etc.

Regional Administration

This is the expenditure and income of the entities of the Autonomous Regions of the Azores and Madeira.

For example: Regional Government of the Azores and Regional Government of Madeira

Local Administration

These are the expenses and revenues of all local public organisations, which operate in close proximity to citizens on a daily basis.

For example: Municipal Councils, Municipal Assemblies, Parish Councils, etc.

Social Security

These are the expenses and revenues of the system that provides support for Social Security, which itself is comprised of subsystems.

Public Administrations

These are the combined expenses and revenues of all the Public Administration branches.

For more information, contact the DGO Directorate-General for Budget.

The DGO is the public entity responsible for regulating and controlling the budget process. Find in detail all the information about the Budget preparation process or clarify any additional questions.
Visit DGO website