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supermajority of votes cast, and only if the performance of a permanent duty of the State requires this in an essential manner” (Constitution, s. 82). Finally, Finland also requires the objectives of State enterprises to be presented with the annual State budget.

4.2. Timing of submission of the annual budget

Only in two of the four countries does the constitution state the timing of the submission of the draft annual budget to the legislature. For Denmark, this is quite specific: four months before the beginning of the next fiscal year. In contrast, Finland’s Constitution merely requires submission to be “well in advance of” the next fiscal year. Finland’s State Budget Act, 1988, does not contain a more precise date. It delegates “provisions concerning the stages of and procedures to be followed in the preparation of the budget proposals to government decree” (s. 10a). In practice, the annual budget is normally submitted to Parliament in early September (Blöndal et al, 2002, Box 3), i.e. about four months before the fiscal year begins.

In Sweden, the near-constitutional Parliament Act states that the budget year begins on 1st January and that the government shall submit a bill setting out proposals for State revenue and expenditure for the budget year (the Budget Bill) no later than 20 September. Since general elections are usually held in the middle of September, the same law also makes provision for submission of the budget to Parliament if the 20 September deadline cannot be met on account of a change of government. In this case, the annual budget must be presented within 10 days from the date a new government takes office, but no later than 15 November (Art. 3.2.1).

In Norway, the timing of submission is not laid out in statute law, but in Parliament’s Rules of Procedure: “a Royal Proposal concerning the Fiscal Budget for the fiscal year shall be submitted to Parliament within six days after its opening” (s. 19); Parliament opens on the first weekday of October. “A report to Parliament concerning the National Budget is submitted at the same time” (s. 19). In practice, the Ministry of Finance prepares a report on the objectives and new policies in each budget.

Given these legal deadlines for budget submission to the legislatures, the timetable for budget preparation within the executive is regarded as an internal matter. The State Budget Act, 1988, of Finland expressly states that provisions concerning the stages of and procedures to be followed in the preparation of the budget proposal may be issued by government decree. The ministries of finance of all four countries issue budget circulars that provide guidelines for budget preparation within ministries, for presentation and approval by councils of ministers. The circulars are usually decided by the ministries of finance, after consultations with other ministries.

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In Sweden, the two-stage budget approval process introduced in the mid1990s was changed as from the spring (March-May period) of 2002. The government is now obliged to present proposals for guidelines for economic and budgetary policy in April (this was optional previously). No overall expenditure ceiling or specific ceilings for the 27 expenditure areas are presented or voted on. These issues are instead included in the budget bill in September. The reason for the change (relative to the system introduced in the mid-1990s) was that Parliament did not wish to carry out two budget procedures every year.

4.3. Non-adoption of the annual budget before the year begins

With an emphasis on reaching consensus, it is rare for the budget not to be adopted by the Parliaments of the four countries before the new fiscal year begins. Nonetheless, the possible non-adoption of the budget before the beginning of the year is accorded constitutional status in three of the four countries, as follows.

In Denmark, “where it is expected that the reading of the Finance Bill for the next fiscal year will not be completed before the beginning of that fiscal year, a provisional Appropriation Bill shall be laid before the Folketing” [s. 45(2)]. In Finland, if “the budget is delayed beyond the new budgetary year, the budget proposal of the government shall be applied as a provisional budget in a manner decided by the Parliament” (s. 83). Similarly, Sweden’s Constitution provides that when time does not permit final adoption of the national budget before the start of the budgetary period, the Riksdag shall approve appropriations as required to cover the period until the budget is adopted. Delegation of parliamentary authority may be involved: “the Riksdag may authorise the Committee on Finance to take such a decision on the Riksdag’s behalf” (Instrument of Government Act, Art. 9.4).

4.4. Content of the budget and types of appropriations

The principles of budget unity and annuality are incorporated in the Constitution of Finland, but not in those of the other countries. Finland’s Constitution provides budget authority – for both revenues and expenditures – for one year at a time. In Sweden, although the principle of annuality is upheld, the Constitution mentions an exception – Parliament may decide on appropriations for a period other than the budget period. Denmark and Norway have not included these principles in their constitutions.

Both the Constitution and the State Budget Act in Finland and the State Budget Act in Sweden specify various types of appropriations. These are:

●Fixed appropriations. These are appropriations that may never be exceeded – the annual budget provides legally binding upper limits for

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spending. Moreover, any unused budget authority for fixed appropriations may not be used in subsequent fiscal years.

●Multi-annual appropriations. These are also appropriations that may never be exceeded. However any unused budget authority may be used in subsequent fiscal years, up to a maximum of two years (Finland State Budget Act, s. 7) or three years (Sweden State Budget Act, s. 3) beyond the budget year in which the appropriation was presented in the budget bill. In Finland, multi-annual appropriations are called “transferable” appropriations, as budget authority may be transferred between years.

●Flexible appropriations (Sweden). These are appropriations that may be temporarily exceeded without any additional authority from Parliament, by use of an appropriation credit (anticipated from the next year’s budget), up to a maximum of 10%. This authority may be exceeded for meeting spending unexpected at the time of appropriation approval, or to ensure the fulfilment of a purpose decided by Parliament. The government annually requests such an authority of Parliament, mainly for appropriations for social welfare benefits. Unused funds from flexible appropriations may be carried over and spent during a subsequent fiscal year.

In Finland, the Constitution allows net appropriations, transfers, carryover, and borrowing of future appropriations. Also, the State Budget Act defines estimated appropriations, which may not be transferred to later financial years. However, the law permits estimated appropriations to be exceeded, provided any excess is based on need. Permission to exceed an estimated appropriation may also be granted in the case of a chargeable activity, up to an amount equalling the accumulated revenue. The latter provision allows any government agency that collects fees for service delivery to spend any excess fees, provided this is done on the basis of law.

In Sweden, the State Budget Act prescribes gross appropriations as a general principle. However, exceptions can be made. If revenues cover partially the expenditure of a specific area, net appropriations are included in the State budget. If revenues totally cover expenditure in a specific area, neither the revenues nor the expenditures are included in the budget. Power is also delegated to the government to decide on the use of revenues deriving from goods and services provided by the State if the demand is voluntary.

In Denmark and Norway, various types of appropriations are also defined, but not in law. In Denmark, the budget regulations provide considerable details on the different types of fixed and flexible appropriations, including for multi-year and contingent appropriations, as well as appropriations for different expenditures (personnel, operations, construction) and for the treatment of appropriations for transfers to State enterprises.

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In Norway, Parliament’s Budgetary Regulations (s. 7) allow, by a system of catchwords associated with each appropriation: 1) transfers from one budgetary period to the next for current expenses, up to 5%; 2) exceeding “estimated appropriations” when provisional projections need to be exceeded; 3) the carry forward of expenditures, for up to two years, for building, construction and materials, and other expenditure which Parliament decides to be necessary; and 4) transfers of underspent amounts for spending under other budget chapters. Also, gross budgeting is allowed although all government agencies can be budgeted on a net basis (in practice, higher education institutions are the main bodies budgeted on a net basis).

4.5. Documents to accompany the draft budget law

In Denmark, Finland and Norway, laws do not lay out budget documentation requirements. In general, government regulations or ordinances spell out the main budget documentation requirements for ministries. Discretion is provided to the ministries of finance, who collaborate with parliamentary budget committees when deciding the precise documentation requirements for the annual budget. Given the many executing agencies under ministries, the ministries themselves generally instruct agencies on how to present budget materials, subject to central guidance by the Ministry of Finance. In Sweden, the Parliament Act prescribes that the “budget bill shall contain a finance plan and an allocation of appropriations according to expenditure areas” (Art. 3.2). Additional legal requirements are described below.

4.5.1. Medium-term macroeconomic framework and fiscal strategy

Two of the four countries (Finland and Sweden) prescribe by law the establishment of a medium-term budget framework. In practice, all four countries prepare such frameworks and provide them to Parliament (this only began in 2005 in Norway). For Sweden, the State Budget Act allows the government to introduce ceilings on government expenditure for a period longer than one fiscal year. If the government does not present such a proposal, it must present a long-term estimate of how government revenue expenditure and borrowing will develop on the basis of unchanged policies.

4.5.2. New measures versus existing expenditure programmes

Although not an explicit legal requirement in the four countries, major new budget policy changes are necessarily presented to Parliament.