Federal budget of Nouvelle Alexandrie
| Country | Federation of Nouvelle Alexandrie |
|---|---|
| Fiscal Year | 1758 AN |
| Budget Total | NAX€20,941.9 billion as enacted |
| Revenues | NAX€19,360.0 billion |
| Expenditures | NAX€20,941.9 billion as enacted |
| Deficit | NAX€1,581.9 billion as enacted (3.1% of GDP) |
| GDP | NAX€50,348 billion (1758 AN budget as enacted); about NAX€50,140 billion as recorded at the close of 1758 AN |
| Debt | NAX€30,613.7 billion as enacted (60.8% of GDP); about NAX€31,219 billion (62.0%) projected after the Economic Emergency and Recovery Act, 1758; about NAX€30,900 billion (61.6%) at the close of 1758 AN |
| Date Submitted | 8.I.1758 AN |
| Submitted by | Council of State |
| Date Approved | 2.IV.1758 AN |
| Approved by | Cortes Federales of Nouvelle Alexandrie |
| Tax Rates |
|
| Debt Repayment | NAX€883.4 billion interest; about NAX€306 billion principal (1758 AN) |
| Special Funds |
|
| Sovereign Wealth Fund | Federal Sovereign Wealth Fund |
The federal budget of Nouvelle Alexandrie comprises the spending and revenues of the government of the Federation of Nouvelle Alexandrie. The budget is the financial representation of the priorities of the government. The government primarily spends on healthcare, retirement, and defense programs. The non-partisan Legislative Budget Office of the Cortes Federales of Nouvelle Alexandrie provides extensive analysis of the budget and its economic effects.
A single instrument, the general appropriations and taxation Act, carries both the appropriations for the year and the rates of federal taxation, so that the spending and revenue sides are settled together. Federal spending is dominated by the block transfer to the Regions, which has taken about a fifth of every budget since 1730 AN, and by labor, defense, and social security. Revenue rests chiefly on the federal income tax and the social contributions levied on earnings.
Alongside the annual appropriations the Federation maintains a system of federal special funds, dedicated Treasury accounts that carry their balances between years, of which the National Fiscal Reserve and Emergency Fund is the largest and serves as the reserve for counter-cyclical drawings. The Federal Sovereign Wealth Fund stands outside the operating budget, receiving a dedicated contribution tax and returning half its investment income to general revenues. The Federation has run a deficit in recent budgets, and public debt has risen from roughly 47 percent of GDP around 1730 AN to 61.6 percent at the close of 1758 AN and 67.4 percent at the close of 1759 AN.
The budget in force in 1758 AN was set by the General Appropriations and Taxation Act, 1758, tabled by Treasury Secretary Warren Ferdinand and given Royal Assent by King Sinchi Roca II on 2.IV.1758 AN, and reopened later that year by the Economic Emergency and Recovery Act, 1758.
History
The Federation's early public finances were shaped by the New Prosperity Plan and by the chartered settlement companies through which much of its territorial expansion was financed, an arrangement that left substantial obligations off the federal accounts. The reckoning that followed, over the 1690s and into the 1710s, produced the system of federal special funds described below, which gave those obligations a place in the accounts as well as creating dedicated reserves.
The instrument dates to the General Appropriations and Taxation Act, 1719, which created the idle lands tax still levied in 1758 AN. That Act was introduced in the 6th Cortes Federales by Paolo Antonio Aguilar, Deputy from Santander. A Deputy likewise introduced the General Appropriations and Taxation Act, 1730 in the 8th Cortes Federales. By 1758 AN the instrument had become a government measure, introduced by the Council of State itself and tabled by the Secretary of the Treasury.
The composition of federal spending has been more stable than its scale. Appropriations rose from NAX€8,979.1 billion under the 1730 AN Act to NAX€20,941.9 billion in 1758 AN, while the Regional Budget held its share of the total across both. The conspicuous change is the cost of the debt. Servicing took NAX€14.0 billion, or 0.156% of appropriations, in 1730 AN, and NAX€883.4 billion, or 4.2%, in 1758 AN.
| Line | 1730 AN | 1758 AN |
|---|---|---|
| Total appropriations | 8,979.1 | 20,941.9 |
| Regional Budget | 1,900.0 (21.3%) | 4,251.1 (20.3%) |
| Debt servicing | 14.0 (0.156%) | 883.4 (4.2%) |
Budget process
The Office of Management and Budget, within the Department of the Treasury, prepares the budget and supervises its administration across the executive agencies once enacted. The Council of State proposes it, and the Secretary of the Treasury tables it in the Federal Assembly.
The Budget and Finances Committee of the Federal Assembly then reports on the bill, and measures carrying fiscal provisions are referred to it jointly with the committee for the subject matter. Its report is not a formality: the committee has repeatedly recast government measures at committee stage, and it receives the Treasury's continuing reports on the execution of appropriations it has approved.
The Chamber of Peers is the revising house, and its powers over a budget are narrower than over ordinary legislation. Under Part III of the Cortes Federales Act, 1694 a proposed law appropriating revenue or imposing taxation may not originate in the Chamber, and the Peers may not amend it, nor amend any bill so as to increase a charge or burden on the people. What the Chamber may do is return such a bill to the Federal Assembly by message, requesting the omission or amendment of particular items; the Assembly may make those changes or not, as it thinks fit. The Budget is also among the matters the Chamber may not delegate to a standing committee, so it is taken in plenary. Enactment follows Royal Assent, after which the appropriations and the tax rates take effect together.
The Cortes Federales may amend an enacted budget during the year by a further Act, which adds to the appropriations already voted rather than replacing them.
Execution is audited by the Federal Audit Office, the Federation's supreme audit institution, established under the Federal Audit Office Establishment and Function Act, 1737 within the Department of the Treasury. The Office supervises the implementation of the budget and certifies the federal financial reports, and its Auditor-General, appointed for a single non-renewable term of six years, lays an annual report before the Cortes Federales. Individual appropriating Acts routinely name the Office as the auditor of the programs they fund.
Receipts
Federal receipts are projected head by head at the rates set by the general appropriations and taxation Act for the year. The federal income tax and the social solidarity tax are the two largest heads by a wide margin, together supplying nearly three quarters of all receipts, followed by the value added tax and the federal corporate tax. Beneath them sit the unemployment insurance tax, the gift and estate tax, the dividend received from the Federal Sovereign Wealth Fund, and a long tail of smaller heads, among them customs and import duties and the idle lands, carbon, petroleum, documentary stamp, tobacco, and real estate taxes.
Certain receipts are collected but excluded from operating revenue. The Federal Sovereign Wealth Fund contribution tax is deposited directly into the fund and is not available for appropriation. So is the share of the Unified Alexandrium Resource Authority volume levy owed to the Region of Alduria, together with the levy's other per-gram allocations. The Alexandrium Sustainability and Strategic Management Act, 1750 divides the NAX€65 charged on each gram across nine dedicated funds and recipients:
| Destination | Per gram |
|---|---|
| Strategic Reserve and Conservation Fund | 25.00 |
| UARA Unified Operations Fund | 15.00 |
| Circular Economy and Recycling Program Fund | 8.00 |
| Strategic Research and Development Fund | 7.00 |
| Federal Sovereign Wealth Fund | 3.50 |
| Regional and Rural Equalization Fund | 2.00 |
| Region of Alduria | 2.00 |
| National Fiscal Reserve and Emergency Fund | 1.50 |
| National Qullqa System | 1.00 |
| Total | 65.00 |
A further statutory requirement directs 12 percent of federal Alexandrium revenues, NAX€29.8 billion in 1758 AN, into non-resource investment.
Alexandrium reaches the budget by two routes that behave differently. The volume levy is charged on weight, so its yield does not move with the price; the value-indexed taxation of the sector does. The distinction was visible in 1758 AN, when the levy held steady through the fall in the mineral's price while Alexandrium receipts as a whole fell 19.4 percent, from NAX€308 billion to NAX€248 billion.
| Receipt head | Amount |
|---|---|
| Federal corporate tax | 1,762.2 |
| Federal income tax | 7,304.2 |
| Income tax credits | −883.6 |
| Value added tax | 2,013.9 |
| Customs and import duties | 100.7 |
| Social solidarity tax | 6,899.4 |
| Unemployment insurance tax | 591.4 |
| Gift and estate tax | 414.6 |
| Federal Sovereign Wealth Fund dividends | 400.0 |
| Alexandrium federal receipts | 248.2 |
| Idle lands tax | 138.7 |
| Carbon tax | 95.5 |
| Petroleum tax | 92.3 |
| Documentary stamp tax | 58.6 |
| Tobacco tax | 44.5 |
| Real estate tax | 39.0 |
| Other receipts | 40.4 |
| Total receipts | 19,360.0 |
Expenditures
Appropriations divide into departmental programs and the service of the public debt. The Regional Budget, the block transfer to the thirteen Regions, is the single largest line and has been about a fifth of the total since 1730 AN. Labor, defense, and social security follow. In 1758 AN each of those three took a share in double figures, and with the Regional Budget they accounted for 57.1 percent of all federal spending.
A budget may also carry targeted measures within the departmental totals rather than as a separate appropriation. The 1758 AN Act carried two, an additional NAX€10 billion for the program of the Aldurian Economic Diversification and Recovery Act, 1755 and NAX€8 billion for a transition measure in Oportia, funded by NAX€15 billion of savings and deferrals identified across other departments.
| Department | Appropriation (NAX€ billions) | % of total |
|---|---|---|
| Regional Budget | 4,251.1 | 20.3% |
| Department of Labor | 2,732.2 | 13.0% |
| Department of Defense | 2,640.4 | 12.6% |
| Department of Social Security and National Solidarity | 2,345.4 | 11.2% |
| Department of Civil Works and Transportation | 1,424.8 | 6.8% |
| Department of Education, Culture, and Sports | 1,323.9 | 6.3% |
| Department of Energy and Environment | 1,020.7 | 4.9% |
| Debt repayment and servicing | 883.4 | 4.2% |
| Department for National Mobilisation | 831.9 | 4.0% |
| Department of Interior | 766.5 | 3.7% |
| Department of Research and Development | 612.2 | 2.9% |
| Department of Treasury | 434.5 | 2.1% |
| Department of State | 381.5 | 1.8% |
| Others | 374.9 | 1.8% |
| Department of Justice | 329.8 | 1.6% |
| Department of Housing and Urban Development | 306.7 | 1.5% |
| Federal Sovereign Wealth Fund | 146.1 | 0.7% |
| Department of Trade and Industry | 135.9 | 0.6% |
| Total | 20,941.9 |
Special funds
- People's Contribution Fund of Nouvelle Alexandrie
- Special National Defense Fund of Nouvelle Alexandrie
- Federal Infrastructure Fund of Nouvelle Alexandrie
- Social Services and Education Special Reserve Fund of Nouvelle Alexandrie
- National Fiscal Reserve and Emergency Fund of Nouvelle Alexandrie
- National Emergency Management Fund of Nouvelle Alexandrie
- National Resilience Fund (Nouvelle Alexandrie)
Alongside the annual appropriations the Federation maintains a system of federal special funds, dedicated accounts in the Treasury, each tied to a stated national purpose and each carrying its balance between years instead of lapsing at the close of the fiscal year. The Cortes Federales created the system in the late 1690s, after the fiscal reckoning that followed the New Prosperity Plan era. It served two purposes. It established dedicated reserves for specific national purposes, and it gave the Federation a mechanism for gradually recognizing and resolving the liabilities the Plan had left off the federal balance sheet. Capitalization came from direct appropriations, from redirected settlement company assets, and from accounting adjustments.
Each fund carries a distinct mandate. Military contingencies are the charge of the Special National Defense Fund, which also absorbed infrastructure obligations attached to defense installations and strategic transportation networks, and through which the annual authorization for the Federal Forces is drawn. Infrastructure maintenance and the completion of New Prosperity Plan projects fall to the Federal Infrastructure Fund. The Social Services and Education Special Reserve Fund supports the social programs established under the same Plan. General-purpose reserves against economic shocks are held by the National Fiscal Reserve and Emergency Fund. Disaster response and civil defense capabilities are maintained by the National Emergency Management Fund.
Two later funds sit outside that original structure. The National Resilience Fund was established by the binding referendum of 24.XII.1757 AN and given its statutory form by the National Resilience Fund Establishment Act, 1758, in force 15.XI.1758 AN. A dedicated reserve of last resort for recovery from qualifying national disasters, it is capped at NAX€50 billion, with no single disbursement above NAX€15 billion. It is capitalized from unspent appropriations, non-recurring receipts, and fifteen percent of a certified year-end surplus, without new taxation or borrowing. It neither absorbs nor supplements the National Fiscal Reserve and Emergency Fund, and each disbursement beyond a first emergency tranche requires a specific resolution of the Cortes Federales. The establishing Act does not itself provide that the Fund has reached any particular balance: its first contribution falls due from the first fiscal year after commencement that the Treasury certifies in surplus, and no surplus was certified for the deficit year of 1758 AN, so the Fund carried no balance into 1759 AN.
Older than the rest in conception but separate in purpose, the People's Contribution Fund was created by Article IV of the General Appropriations and Taxation Act, 1719 and opened in 1720 AN as a dedicated instrument for the reduction of the national debt. Three sources feed it. Contributions from any individual, organization, or corporation are exempt from all tax; a taxpayer may elect that no more than half of the income tax due for the year be allocated to the Fund; and commercial bank accounts held by individuals and organizations, though not by corporations, that have lain dormant for ten years are escheated into it. At the close of each calendar year half of the Fund is applied to the service of the national debt, more than NAX€110 billion in total between 1720 AN and 1757 AN. Because the balance is spent down each year rather than accumulated, its holdings have remained small beside the Federation's total debt, standing at NAX€3.6 billion at the close of 1757 AN and NAX€3.5 billion in 1759 AN.
| Fund | 1719 AN | 1750 AN | 1759 AN | Principal drawdowns and movement |
|---|---|---|---|---|
| Special National Defense Fund | 781.0 | 200.0 | 164.0 | Force 1752 initiative, the Fourth Euran War, military modernization |
| Federal Infrastructure Fund | 270.0 | 50.0 | 55.0 | High-speed rail completion, the Pan-Euran and Pan-Keltian highways |
| Social Services and Education Special Reserve Fund | 90.0 | 120.0 | 143.0 | Modest growth; refugee integration costs offset by Alexandrium revenue |
| National Fiscal Reserve and Emergency Fund | 127.0 | 1,500.0 | 1,808.0 | Drawn NAX€220 billion in 1758 AN from NAX€2,000 billion to NAX€1,780 billion; recovered on levy inflow with no further drawing authorized in 1759 AN |
| National Emergency Management Fund | 30.0 | 50.0 | 59.0 | Modest growth; less frequently drawn upon |
| Subtotal, five original funds | 1,298.0 | 1,920.0 | 2,229.0 | |
| People's Contribution Fund | 3.1 | 3.5 | Debt-reduction sinking fund, opened 1720 AN; half applied to debt service each year-end | |
| National Resilience Fund | not yet capitalized | Established 1758 AN; capped at NAX€50 billion; first contribution due from the first certified surplus |
The five original funds do not share a common trajectory. The Special National Defense Fund and the Federal Infrastructure Fund were drawn down to finance the Force 1752 initiative, the Fourth Euran War, and the completion of the high-speed rail and highway programs, the Defense Fund falling from NAX€781.0 billion in 1719 AN to NAX€164.0 billion in 1759 AN. The National Fiscal Reserve and Emergency Fund moved the other way, rising from NAX€127.0 billion to NAX€1,808.0 billion on Alexandrium levy receipts and windfall allocations, overtaking the Special National Defense Fund as the largest of the funds and holding four-fifths of the NAX€2,229.0 billion carried across the five original funds in 1759 AN. The two funds added since, the People's Contribution Fund and the National Resilience Fund, stand apart from that group in both scale and purpose: the first a small, self-liquidating debt-reduction account, the second a capped disaster reserve not yet capitalized.
Since the Alexandrium Sustainability and Strategic Management Act, 1750 the National Fiscal Reserve and Emergency Fund has drawn a fixed share of the Alexandrium levy, NAX€1.50 of the NAX€65 charged on every gram extracted, one of nine dedicated shares of the levy, and it serves as the reserve from which the Counter-Cyclical Stabilization Mechanism makes its drawdowns. Its statutory objective is capital preservation and liquidity, not investment growth. Where the Federal Sovereign Wealth Fund accumulates assets against future returns, the National Fiscal Reserve and Emergency Fund is held to be drawn down, carrying services and standing commitments through a revenue shock without emergency borrowing or mid-year cuts. Because such a drawing spends from an asset, it finances part of a deficit without adding to the public debt. The Mechanism was triggered for the first time after the 1757 Alexandrium market crash; across 1758 AN a drawing of NAX€220 billion authorized by the General Appropriations and Taxation Act, 1758 took the Fund from NAX€2,000 billion to NAX€1,780 billion, NAX€55 billion in each quarter of the year. By 1759 AN it had recovered to NAX€1,808.0 billion as levy receipts resumed and no further drawing was authorized.
Federal Sovereign Wealth Fund
The Federal Sovereign Wealth Fund stands outside the operating budget and meets it at several points. The contribution tax, levied at 8 percent, pays into the fund and cannot be appropriated. The fund also receives NAX€3.50 of the NAX€65 levied on each gram of Alexandrium extracted, under the allocations set by the Alexandrium Sustainability and Strategic Management Act, 1750. In the other direction, the Federation's half-share of the fund's annual investment returns is received into general revenues under the fund's standing distribution policy, and appears in the receipts table as a dividend; it came to some NAX€400 billion in 1758 AN. The fund also appears in the appropriations table in its own right, at NAX€146.1 billion in 1758 AN.
The Sovereign Wealth Fund differs from the special funds in kind. It is an investment vehicle rather than a reserve held against a stated contingency, and the 1750 AN Act bars it from holding Alexandrium extraction, processing, or related assets, a prohibition written to keep a fund intended to outlast the mineral from being exposed to it. Its assets stood at NAX€8.6 trillion at the close of 1758 AN, 3.9 times the combined balances of the special funds.
Surpluses, deficits, and debt
The Federation has run a deficit in recent budgets, financed by net borrowing and, where the counter-cyclical mechanism is engaged, by drawings on the National Fiscal Reserve and Emergency Fund. Public debt stood at NAX€12 trillion against a GDP of NAX€25.5 trillion around 1730 AN, a ratio of roughly 47 percent; the ratio was reported at about a quarter of output at the 1750 AN position. The 1758 AN budget as enacted projected debt of NAX€30,613.7 billion against output of NAX€50,348 billion, a ratio of 60.8 percent; debt closed 1758 AN at about NAX€30,900 billion, 61.6 percent of output, and 1759 AN at 67.4 percent. The rising cost of servicing the debt is the largest single change in the composition of federal spending across the period.
Debt service is met from the appropriations as interest, while repayments of principal are conducted as debt-management operations within the year's borrowing authority and are not accounted as expenditure. Where the Treasury certifies a year in surplus, fifteen percent of the certified surplus is directed to the National Resilience Fund; in a year it does not certify, that fund receives no contribution.
Borrowing under the Economic Emergency and Recovery Act, 1758 was subject to a debt brake: if gross public debt exceeded 65 percent of GDP, the Secretary of the Treasury could borrow no further under that Act until the Cortes Federales authorized it. The brake did not apply to borrowing under the ordinary budget. The General Appropriations and Taxation Act, 1760 repealed that brake and replaced it with a standing fiscal framework.
| Item | Amount | |
|---|---|---|
| Total receipts | 19,360.0 | |
| of which general and tax receipts | 19,111.8 | |
| of which Alexandrium federal receipts | 248.2 | |
| Total outlays | 20,941.9 | |
| of which departmental programs | 20,058.5 | |
| of which debt interest | 883.4 | |
| Overall balance | −1,581.9 (−3.1% of GDP) | |
| Financing: National Fiscal Reserve and Emergency Fund drawing | 220.0 | |
| Financing: net borrowing | 1,361.9 | |
| Public debt, end of year | 30,613.7 (60.8% of GDP) | |
| National Fiscal Reserve and Emergency Fund, end of year | 1,780.0 | |
Recent budgets
The General Appropriations and Taxation Act, 1758 was the first budget written after the 1757 Alexandrium market crash and the Recession of 1757. It carried the 1757 AN tax rates forward unchanged and made the whole of its adjustment on the spending and financing sides, protecting the producing Regions rather than reducing spending in them, and meeting the cost through savings elsewhere, a drawing on the National Fiscal Reserve and Emergency Fund, and borrowing.
The Economic Emergency and Recovery Act, 1758, assented to on 2.V.1759 AN, reopened that budget with a recovery package of NAX€750 billion, of which NAX€600 billion was a direct appropriation met entirely by borrowing and NAX€150 billion took the form of credit guarantees and tax deferrals requiring no new borrowing. It left the year's tax settlement in place and drew nothing further from the National Fiscal Reserve and Emergency Fund. Measured against the enacted budget, the package was projected to lift net new borrowing from NAX€1,361.9 billion to about NAX€1,961.9 billion and public debt to about NAX€31,219 billion, near 62.0 percent of GDP. The borrowing was placed under a debt-brake requiring the Secretary of the Treasury to return to the Cortes Federales before borrowing further if gross public debt were to cross 65 percent of GDP.
Budgets
- General Appropriations and Taxation Act, 1719
- General Appropriations and Taxation Act, 1730
- General Appropriations and Taxation Act, 1758
- Economic Emergency and Recovery Act, 1758
- General Appropriations and Taxation Act, 1760
