For Finance Secretary Luis Videgaray, the goal of the 2016 budget is to spend money more efficiently so that it serves to boost employment and economic development.
One of the strategies being implemented to accomplish that goal is to start from scratch with a zero-based budgeting formula.
“The government of President Peña Nieto is determined in developing a better public expenditure budget, focused on investing resources in categories that trigger job creation and the development of the country, with the betterment of the population always in mind,” he said in an interview.
“It’s not the people or the businesses who have to tighten their belts, but the government. Ideally, we can make adjustments to the budget in an intelligent and efficient manner; a better exercise of public expenditure,” Videgaray continued.
In order to achieve this, the Finance Secretariat (SHCP) had to first review the entire structure of the budget, a task that took several months.
The SHCP has proposed a zero-based budget structure which is currently under consideration by the Chamber of Deputies. Under the new approach, the existence of each budget program must be justified, as well as its allocated resources.
This, it is expected, will allow the Finance Secretariat to assign public funds based on results delivered while at the same time spending said funds efficiently, positively impacting public welfare.
Videgaray recognized that the federal government has obligations that it must meet, such as the payment of pensions, contributions to the states and payments of principal and interest on foreign debt.
On a related note, the Finance Secretary said that Mexico is prepared to face potential volatility in international financial markets thanks to the recently approved reforms, while “Mexico’s international reserves have reached record highs, and our credit line with the IMF [International Monetary Fund] is flexible.”
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