Limits on the legislature’s powers to change the executive’s draft budget. One of the legislature’s most important budget powers is its ability to alter the size and composition of the draft budget proposed by the executive. Some countries’ parliaments have unlimited amendment powers. However, for medium-term fiscal stability, it is desirable to limit the legislature’s powers. One option is to allow the legislature to approve additional expenditures provided additional revenues are also raised, so that the fiscal balance is left unaltered. A more restrictive option is to prevent the legislature from increasing total expenditure, allowing changes only in the composition of expenditure. Westminster system countries often have even more restrictive rules, allowing only decreases in spending (Canada) or requiring parliament to seek government approval for changes that would affect the government’s proposed medium-term fiscal framework in more than a minor way (New Zealand). For practices in a range of countries, see OECD (2007) and Wehner (2010).

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