Lesson 10: TOOLS OF FISCAL STRATEGY
Fiscal policy is one tool a government has to achieve its economic and social objectives. The operation of fiscal policy is governed by the Public Finance Act 1989 (PFA). The Act requires the Government to outline its fiscal policy intentions in the annual Fiscal Strategy Report(FSR). The FSR sets out the Government’s long-term fiscal objectives relating to expenses, revenue, the operating balance, debt and net worth over a period of at least 10 years. The Fiscal Strategy Model (FSM) projects the financial performance and the financial position of the government over a medium-term horizon and is normally published with the latest Economic and Fiscal Update.