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Budget Writing Tips for Reporters

Michael Arkus

This backgrounder was written by Michael Arkus who drew on materials from the International Budget Project at the Center on Budget and Policy Priorities. We’d like to thank IPD director Warren Krafchik for his help.


I want a juicy story!

Although reporting on budgets might seem less ‘sexy’ than the usual suspects of war, disaster and catastrophe, nothing is more fundamentally important: the budget provides the fuel – the money – on which all else runs. It sets out a government’s policy priorities in the social, economic and military sectors. Given this central role, it is clear that it will be the prime target of special interests both within the state bureaucracy and outside.

The journalist’s job is to shine a spotlight on all expenditures as well as on all sources of revenue, whether from taxation, natural resources or international loans, to provide as much transparency as possible. This will help journalists highlight, in their stories, what kinds of policies the government is pursuing. Ideally, a close look at the budget will help show whether government policies are favoring the rich or the poor and will highlight potential cases of corruption and mismanagement.

As the International Budget Project (IBP) makes clear in its Guide to Budget work for NGOs section 4.2 (http://internationalbudget.org/wp-content/uploads/guide_to_budget_work1.pdf) governments may rely on budget gimmicks and other accounting tricks to obfuscate the true state of the budget, rather than try to reconcile the many competing claims within a sustainable fiscal framework. This is especially so where the government has items and entitlements such as social security spending that it is committed to fill. Hence the journalist must use his craft as a sleuth to check the credibility of both revenue and expenditure items, and track the various items of the budget throughout the fiscal year.

Getting the ball out of the scrum

The budget, because of its central importance, will be a magnet for groups lobbying for opposing goals. This is good for journalists as it means there will be many sources to investigate. Industry and business, for example, will want tax policies that help their interests. Labor unions and civil society will likely push for social spending to help the less privileged and more spending on health care and education. They may be involved as the budget is being drawn up and will certainly want to comment afterwards so these groups can be helpful sources for journalists throughout the budgetary process.

Officials, especially in the financial and economic bureaucracy, are sources to be cultivated, as are the various suitors for budgetary perks, including businesses and industries that have contributed heavily to the campaigns of the ruling parties. Many civil groups, meanwhile, seeking to advance the cause of the less advantaged, will have their antennae attuned to picking up signals that might show the government’s direction. At the very least, they will have their own agenda on what they think is needed and this, balanced with the goals sought by industry, business, or any others in the opposing camp, together with their rationale, can serve as a useful scene-setters and curtain-raisers prior to budget publication.

In some countries, natural resources provide much more revenue than taxes. Here journalists have to check with industry, analysts and watchdog groups that revenue projections are realistic, understated (with corruption a possible motive), or overstated to balance the books on paper but portending cuts in expenditure, particularly in social programs, down the line. Here again the journalist’s paramount role comes into play – ensuring transparency, without taking sides, to make sure that all the facts are known.

I can’t see

Clearly, availability of information and transparency vary widely from country to country, and this will obviously have an impact on reporting. The IBP carries out an annual survey that ranks budget transparency in 85 countries, based on the findings of civil society organizations. These have shown that the vast majority of countries fail to provide budget information needed for government accountability. Fewer than 10 provide the extensive information needed for accountability, while more than half fail to make public all the seven key budget reports they produce, keeping it for their own internal use or for international donors.

Given such secrecy, journalists will have plenty of digging to do – within the bounds of their own safety. The first a journalist may officially learn of the budget in some countries may occur only with information made available to the public at large. In some cases reporters may receive embargoed copies a day or so before publication. But in all cases, by maintaining contacts within the bureaucracy, business and industry, labor and civil society organizations they may already have been able to glean an earlier understanding of where matters are headed (possibly giving rise to pre-publication reports). Above all, they certainly will have had an opportunity to set up a forum for immediate comment, criticism etc. from all sectors of society to include in their budget-day stories, once the document is published.

Make Budget Stories Interesting, Colorful and Lively

Even within the constraints imposed by the most tight-lipped governments, journalists have a crucial role to play in bringing home the true impact of the budget ‘in the field,’ in accessible language and with vivid imagery and examples. Yes, that’s right, vivid! Figures themselves might not be vivid, but when you put a human face on them, that is a different matter. And the journalist must do this by highlighting the full impact, social and otherwise, of these figures on real, living people. That is what it’s all about. While fully bearing in mind the necessity for total objectivity to ensure the journalist’s credibility, the reporter can still – and must – highlight this.

If changes in taxation favor the rich and adversely affect the poor, the journalist’s first task is to say so, fully explaining why and how. But equally important, if not more so, is showing, not just saying. If it is true, as the aphorism goes, that a picture is worth 1,000 words in bringing home the truth, then a verbal picture – a skillfully chosen living example with comments of the people actually affected, one way or the other – is worth much more than the sum total of its words. In your very first story on the latest budget write a detailed portrait of a poor family, with quotes, in reaction to the latest changes. Get the reactions of the civil society groups. And never forget to obtain an equally detailed portrait from the wealthy family, or business, that benefits. That could provide yet more telling, biting spice to your story.

The various types of taxes with their different impacts, such as a regressive tax that represents a smaller share of income for higher-income individuals than for lower-income ones versus a progressive tax that requires higher-income people to pay a larger share than lower-income people, are fully explained in Chapter 5 of IBP’s Guide to Tax Work for NGOs and journalists need be familiar with them. But it is in breathing life into these rather dry academic terms that the journalist must truly use his craft.

The concrete example of the already luxurious life style (house/mansion, perks etc.) of – and comments from – the wealthiest in the eventuality of pro-wealthy or corporate tax breaks is objectively legitimate reporting, no less so than a bread-and-butter description of the living conditions of – and comments from – a low-paid working family of four in the case of a VAT increase or cut back in social services, such as health care or education, which affect the poor disproportionately; or of a middle-class family should it be trawled along in the wake of such devices as the United States alternative minimum tax system.

All these are essential if the media report is to grab its audience’s attention and play any significant role in a fuller understanding of a budget’s impact and a government’s larger policy direction. With this in mind, journalists must put under the analytical magnifying glass the budget’s various sectors such as health, education and defense in relation to other sectors, the entire economy at large, historic levels of budget support for each sector (see IBP’s Guide to Budget work for NGOs section 8).

And never forget - front and centre under that magnifying glass will be people, the human face that the journalist puts on those figures to bring out the budget’s varying effects on different population groups. It cannot be repeated too often.

So, what do I do then?

Given this overview, then, of the journalist’s role in assuring budget transparency, coupled with the lack of data and transparency in many, mainly developing countries, as well as potential accounting tricks and gimmicks in others, how do you make your report relevant to your audience when you come down to the nitty-gritty? How do you in fact put this human face on the soulless figures? This involves two rubrics: basic guidelines stemming from budget-specific elements as spelled out by IBP’s guides for NGOs engaged in applied budget work, and general principles, which marry these specifics in actual practice with the general rules of good, accessible, explanatory journalism. There will of necessity be a good deal of overlapping both between and within these rubrics, but the repetition will only serve to drive home the importance of the message.

Basic Guidelines

These revolve around reporting on the basics of revenue and expenditure and the actual figures in each budget.

  • Spell out all sources of revenue whether from taxes, natural resources, international loans etc., and all earmarked expenditures in comparison with the previous year/years. Always remember to take into account inflation, since an increase in absolute terms can mask a decrease in real terms. Chapter 7 and the adjusting for inflation section of chapter 8 of IBP’s Guide to Tax Work for NGOs explain all this in detail, as well as the use of figures as percentages of GDP as a measuring means.
  • Spell out the various taxes used to raise revenue, and their effects on various segments of the population. Regressive taxation tends to favor the wealthy who pay a lesser percentage of their overall income, proportional taxation sees all paying the same proportion, and progressive taxes have the rich paying a higher percentage of their income than the poor. Consumption taxes such as VAT tend to favor the wealthy in that taxes on goods and services represent a much smaller percentage of their total wealth than they do for the poorer sectors. That effect, however, can be mitigated overall if the money raised by VAT is used for services that benefit the poor. This is fully explained in chapters 3, 5 and 8 of IBP’s Guide to Tax Work for NGOs.
  • Follow the budget process throughout the year to see whether predictions are being fulfilled. Budget reporting is not just a one-time exercise - see section 4 of Guide to Budget work for NGOs.
  • Keep in continual contact with all sides in the budget debate for input. For a list of international and civil society organizations ranging from the IMF to national groups that can help in assessing the impact of revenue and expenditure, see part IV of IBP’s Guide to Tax Work for NGOs, and sections 9 and 10 of IBP’s Guide to Budget work for NGOs. Chambers of commerce, business and industry groups should be equally courted. The more people you contact, the more complete a picture you will be able to paint.

General Principles

Now let’s look at it all from the standpoint of the journalist. You have just been presented with the budget document. So how do you bring to bear the guidelines and principles already mentioned or alluded to above? As mentioned, this will involve a good amount of overlap, but this is important since it is the only way you can impart the true nature and impact of any budget to a general audience.

Be a Detective. You are an investigative reporter, a sleuth who is going to extract out of mind-numbing columns of numbers facts that affect individuals on the ground. In fact, you’re not a reporter so much as an auditor and comparative analyst. This involves constant checking with sources of ALL shades of opinion – civil society groups, anti-poverty and other humanitarian organizations, chambers of commerce, business organizations, and government officials themselves. Don’t only look at national organizations. Regional and international bodies can be of great use, too, especially such organizations as the Asian Development Bank, Transparency International, Oxfam, Caritas and United Nations agencies such as the UN Development Programme (UNDP). These can help you track down the claimed sources of revenue from natural resources such as oil, mining, etc. for any shortchanging, as well as for the impact on the least privileged members of society. In many areas such as Latin America Church and other religious groups can be especially helpful.

Think small. Budget figures are enormous, often too large for readers, listeners or viewers to take in. A vast jumble or astronomical figures will immediately bring down an iron curtain in their brains. Assume they have the attention span of a snail, rushing to tune in to their blogs, sports or porn channels: you need to hijack their interest. So while your lead paragraph might have an overall number – the big picture – you’ll get much more traction if it also has the small telling detail. And if this detail includes the individual example of one or more of the budget’s impacts with which your audience can identify, you’ll have a better chance of hooking them. An example could include not only the increased overall spending on the military, or health, or education, but the extra tax that this will mean for a family of four earning X amount a year. So-called sin taxes such as tobacco, drink, entertainment, or user fees such as increases in car licenses, also grab the attention.

Social impact. Following on the above, a good red-flag element is the budget’s effect on ALL income sectors from the poorest to the wealthiest, on each group sector such as children, women, old, on each business sector such as oil, mining, manufacturing, and on each social spending sector such as health, housing, education etc. As noted in point 3.2, you are going to have much more impact when a reader can identify by feeling the effect in his own pocket, and compare it with other pockets. Who is better off as a result of the budget? Who is worse off?

For example, in an analysis of newspaper coverage of the Indian budget recently, Ammu Joseph, an independent journalist and author based in Bangalore, noted that the poor were conspicuous by their absence from budget coverage across all six English newspapers published in Bangalore. ‘Even though most papers claimed that the focus of the budget was on agriculture ("Advantage Farm Inc." and "Agriculture top priority, gets major share" - The New Indian Express; Budget: Focus on farm sector" - The Hindu; "Focus on farm, social sectors - Deccan Herald) no farmers or even agricultural experts were asked for their views,’ he wrote. In fact, far more space was dedicated by all papers to the impact on and reactions from industry, the corporate sector and the stock markets.

Meaningless, misleading and lying numbers. Figures can mean little in themselves, their significance infinitesimal to the tale they can convey when put into a context that is underscored by comparisons. For this there are several benchmarks that need to be observed.

One of the most important is the absolute amount of a sum. Obviously it has to be compared with the budgets of previous years to gauge any increase or decrease, but in doing so inflation must be factored in to put it in real terms since an absolute increase in currency terms can mask a decrease in actual expenditure. Population growth can also play a role in determining whether, for example, an increase in health or education expenditure even after inflation is really an increase. One useful way of accounting for these factors is by expressing revenues and spending in terms of the Gross Domestic Product (GDP). The IBP Guide to Tax Work for NGOs provides a useful Toolkit for Basic Revenue Analysis Techniques in a supplement to chapter 8.

On taxes, the percentages in absolute terms are not going to tell you nearly as much as a relative analysis of what the percentage impact is on the individual’s pocket, perhaps shown as a sort of pie chart of what is left over for each sector of society once generally accepted non-negotiable needs have been met, such as food, clothing, health and housing. Likewise, with other figures the effects must be spelled out.

A major consideration in reporting on non-income tax revenues such as VAT, fees and changes therein is not just the figure itself but the projected percentage of a person’s income this could represent at various income levels, and hence the effect it will have on the money in the pocket at different levels of society, with the severity of the impact in reverse proportion to the wealth of the individual. Examples of this should be included in your reporting. A major issue will be: does it take in from the poor proportionately much more than is paid out for services to them. As IBP’s tax guide points out, VAT’s proportional impact may not be as iniquitous as it seems at first glance if the additional income is used for improving the lot of poorer people with increases in health, education and other social services for them (IBP’s Guide to Tax Work for NGOs chapter 3).

Likewise with projected spending, the overall sum in a given sector may sound either generous or stingy, but it is meaningless unless it is factored against the number of people it is meant to benefit. Here again, comparison with neighbors, and regional and global averages can help to give a much fuller picture.

In military spending, comparisons with neighboring countries and with regional averages will help to ‘locate’ the military budget both in absolute terms and as a percentage of total spending relative to the amount on social services such as health or education. The Stockholm International Peace Research Institute, which tracks military spending, and GlobalSecurity.org which compiles data on military topics can be helpful on these matters.

Another figure that will need analyzing in a similar fashion is any deficit/debt involved. People tend to dismiss the figure once they have mentioned its size even if it is enormous. If you can break it down to show what impact this is going to have on future years, or generations, perhaps in terms of revenue that will be spent on servicing debt instead of providing services, your audience will stop seeing it more as a free ride.

To give your budget figures more resonance, compare them not only with the previous years and projected future years of your own country, but with those of neighboring countries and other countries who have similar resources such as oil-producers (for example, Nigeria with Gabon and Norway and perhaps with a non-oil-producing neighbor like Niger), factoring in such variables as population numbers etc. to give an idea of per capita benefits in relation to the government’s revenue, what proportion each earmarks for health, education etc. For instance, Nigeria is Africa’s most populous country with some 140 million people and its per capita GDP is $700. Gabon, another African oil producer, has barely a million inhabitants and produces much less oil than Nigeria buy its per capita GDP is nearly $6,000. The vast majority of the population, however, is poor, with 90% of income going to the richest 20%.

Put numbers in context. Related to the previous point on numbers, you are going to provide a much better context for your budget story, which after all is about the economic and social welfare of all the population, by giving the often iniquitous gap between rich and poor resulting from the unequal distribution of income, including the numbers/percentages of those living at or below given poverty levels. But simply stating this in terms of a dollar figure can be meaningless or totally misleading. There are several reference points that have to be included. First and foremost is what a certain income level can buy in the respective country. Let us say X amount of the population lives on $1 or less a day. $1 in New York won’t even get you a bus or subway ride, but in an African or Central Asian city and many other parts of the world such a journey may only cost $0.05. Thus you have to give this essential contextual element in terms of a basket of services that can include the price of bread or other staples, transportation costs, available education for children and health services for all. For example, a Cuban might have minimal daily income in cash terms and a generally difficult time in transportation etc., but if he pays nothing for health care and education for his children, and little or nothing for rent, then that $1 could go much further than a sum many times larger in another country.

Similarly, where a person lives may have an important bearing on interpreting budget figures. If the majority of the population is rural and grows a lot of its own food or has barnyard chickens etc. on a larger scale than the urban population, certain budget elements could have different impacts in different areas. Again as with the poverty level, these are essential context details about overall welfare of a country, which should be the main aim of a socially aware budget.

Don’t assume. Another sleuth-like element in budget reporting involves the assumptions the government makes about revenue and expenditure. Never accept them at face value. They may be correct but always check. A healthy skepticism never harmed a reporter. How realistic are these assumptions? Here financial and budgetary experts, as well as civil society organizations with such expertise can help. It is worth checking them against the assumptions of the previous year, which can be weighed against actual performance, to get a track record, as well as against general regional and world economic trends. Faulty assumptions, whether through intention or bad analysis, could provide an excuse later on to cut social spending because the deficit is too high or there is already too much debt etc.

Benchmarks. These are very useful both on overall spending and individual sectors for assessing where the country is going. Firstly there are the internal benchmarks, which can be used to evaluate how the government is going with regard to its proclaimed policies. These include comparisons with the previous year or years to see how the budget projections stood up against reality and certainly have a rightful place in a report on the new budget. Then there are the regional benchmarks for comparing with neighbors’ performances. Equally important or even more so, from the social point of view are international guidelines that the country has accepted such as the UN Millennium Development Goals (MDGs).

These eight goals, adopted at the UN Millennium Summit of 2000 and to be achieved by 2015, commit each country to halve both the proportion of people living on less than $1 dollar a day and that of people who suffer from hunger; ensure that all boys and girls complete a full course of primary schooling; eliminate gender disparity in primary and secondary education preferably by 2005, and at all levels by 2015; cut by two thirds the mortality rate among children under five; cut by three quarters the maternal mortality ratio; halt and begin to reverse the spread of HIV/AIDS, and the incidence of malaria and other major diseases; halve the proportion of people without sustainable access to safe drinking water, and achieve significant improvement in the lives of slum dwellers (by 2020); and develop a global partnership for development. Many of these are clearly budget-related and with some digging from social and human rights organizations (Oxfam, CARE etc.), if not from the governments themselves, provide a great scorecard for what a government is doing about what should be its principal goal.

Another useful overall benchmark is the UNDP’s annual Human Development Report, which is useful for giving you a measure for the distance already covered and that which remains to be run. Other UN agencies can be useful here for specialized data such as the UN World Health Organization (WHO) or the UN Children’s Fund (UNICEF). This latter’s Innocenti Research Centre produces documentation on the evolving needs of children and can help in producing a context for how the budget affects the lot of children. There are doubtless many other gauges that you will come across in discussing the issues with these bodies.

Non-tax revenue. Oil, mining and other natural resources can require extra-sleuthing. These can be wide-open opportunities for corruption, especially if you have a military dictatorship as Nigeria did under Sani Abacha, but also in much less extreme regimes. Clearly checking the reports of the companies involved, BP say, should help. Other international initiatives like Transparency International, Extractive Industries Transparency Initiative (EITI) and Revenue Watch Institute will be very important in such fields. Obviously, caution will be needed in certain non-democratic countries, where espionage charges might be used to prevent sleuthing on possible corruption. Countries like Congo-Brazzaville, Chad, Azerbaijan, Kazakhstan, and Peru have civil society groups checking oil revenue, although Congo-Brazzaville has arrested leading civil-society anti-corruption campaigners.

Ongoing dialogue. Full budget reporting will require you to double-check not only government claims, assumptions and figures with opposition politicians, civil society, anti-poverty, humanitarian and human rights organizations, but then to check back their claims with the government. This to-ing and fro-ing of course is an age-old practice of good journalism, but it can be doubly rewarding in the case of budget reporting insofar as fatuous comments from officials who try to counter serious arguments that undermine their budget assumptions will only serve to highlight the budget flaws themselves, if there are any. You might find yourself the virtual moderator of a full-scale debate – all the better to bring out full transparency.

What will also be ongoing will be your own auditing of the budget throughout the year: is it on track to meet the assumptions, are certain expenditures being short-changed etc.

It’s the people, stupid! Once again, the budget insofar as reporting is concerned is not really about figures; it is about people, the way the figures affect people. This is the touchstone for your audience. Whenever you can meld in the translation of these figures into personal, individual terms, you will find a sure way of grabbing your audience’s attention. And since it is about people, a lot of the points above, of necessity, overlap and run into each other. You should always ask yourselves: what does this mean for the individual, for each sector of society, from the poorest to the wealthiest, as well as for the country as a whole, etc. And get actual quotes from the affected families about what this means for them.

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