Finances, taxes and public service

The great importance of data of public finance statistics as a basis for central decision-making in terms of fiscal, economic and monetary policies becomes obvious when considering the large share of public budgets expenditure in the gross domestic product (about 45%). In the European Economic and Monetary Union, solid public budget management is of particular importance. Meeting the annual limits regarding government deficit (3%) and government debt (60%), both measured as shares of the gross domestic product, are the major targets of the European stability pact. They are calculated on the basis of data of public finance statistics, applying the internationally comparable rules of the European System of Accounts (ESA95).
Public finance statistics of public budgets regularly provide a comprehensive and detailed picture of the entire public finance management. They show the revenue obtained by the public budgets, the expenditure that was financed by such revenue, and the extent to which public budgets had to use outside funds (borrowing on the credit market) or reserves to cover the financial balance (difference between revenue and expenditure incl. internal offsetting items). The burden placed on the future public budgets through outside funds borrowed is shown in the tables on public debt.

The term “public funds, institutions and enterprises” refers to units which usually were created by hiving off public tasks from the core administration and which manage their financial matters in a separate accounting system (own budget, annual accounts) outside the core budgets. The core budgets are directly or indirectly responsible for such units or hold more than 50% of the capital or voting rights. Extra budgets are all public funds, institutions and enterprises which, according to the European System of National and Regional Accounts, are included in the general government sector. The decisive criterions here are economic behaviour and type of financing. If their turnover covers less than 50% of the production costs and the remaining deficit is offset by the core budgets, they are allocated to the general government sector.

The tables on the equalisation of revenue indicate the level to which the different revenues of the Länder were equalised through equalisation payments of the Federation (vertical equalisation of revenue) and between the Länder (horizontal equalisation of revenue) in Germany.
Taxes are the main source of government income. Information on tax generation is therefore of particular importance to the legislators, for instance, with respect to tax reforms and estimations of tax revenue. However, taxpayers, i.e. private individuals and enterprises, are also interested in receiving quantitative tax information.
In addition, tax statistics serve to generally monitor economic development. They provide information on all spheres of the national economy, including the income of young persons, taxed amounts of beer and tobacco, turnover or profit of businesses through to the transfer of assets in inheritance cases.
Tax statistics are based on analyses of the data obtained in the context of the taxation procedure. Thus the burden placed on both economic units and statistical offices is smaller compared to the burden caused by direct interviews. Tax statistics hence make a non-negligible contribution to reducing the administrative burden.

One of a public budget’s largest expenditure items is personnel expenditure. In addition to active duty personnel expenditure, it becomes increasingly important to take into account the expenditure on the old-age pensions for retired public officials, judges and professional soldiers. The results of the statistics on public service personnel and on public service pensioners are a basis for political decisions to be taken on the further development of legal provisions on public officials and their remuneration and pensions as well as on collective agreements. They provide important basic data to be used for changes in the public old-age pension system and serve as a basis for projections of future expenditure on pensions and related benefits. These statistical results are also used by the Federation and the Länder for medium-term financial planning, they are a basis for studies on the personnel structure and the organisational setup, for the compilation of equal opportunity concepts and for benchmarking and they are used by the Länder and municipalities to reveal potential for rationalisation. Taking into account that public officials are not obliged to contribute to social insurance, the personnel statistics is the only comprehensive source of information to supplement the data collected by the Federal Employment Agency on employees subject to social insurance contributions.