Abstract

Introduction. Current budget balance is one problem encountered by the government which aims are to make a country/region prosperous, fiscal policy is one of the government’s efforts to regulate budget balance. In the case of balance budget and personnel expenditure, many governments have not been able to implement fiscal policies properly so that budget imbalances often occur. This research was conducted to determine how the balance of the budget and its relationship with fiscal policy in South Sumatra Province cause in each district/city has a unique area so that inequality often occurs. The data used in this study are secondary data from the Central Bureau of Statistics and the Directorate General of Taxes and Finance. The data analysis method which was seduced was panel data regression. The results of this study are expected to be a reference material for further research and government considerations in planning budget expenditures in South Sumatra Province. Purpose. This study analyzes fiscal expenditure which includes balance funds and personnel expenditure and economic growth in budget balance in South Sumatra Province in 2009 – 2018. Results. The results of this study indicate that (1) the balance funds and personnel expenditure have a positive effect on budget imbalances in the Regency/City of South Sumatra Province, but the effect of the balance funds is not significant, (2) economic growth has a negative and significant effect on budget imbalances in South Sumatra Province. Conclusion. Based on the regression results of the balance fund variable, personnel expenditure and economic growth are the determining variables for the balance of the budget in South Sumatra Province because it is seen from the R Square value of 72.8 percent and the greatest influence of fiscal policy in determining the balance of a budget is personnel expenditure. The implications of the research results can be a strategy to regulate the balance of the budget in each district/city South Sumatra Province. In addition, by regulating sound fiscal policy by the government, we hope it can reduce the budget deficit and create budget balance.

Highlights

  • Current budget balance is one problem encountered by the government which aims are to make a country/region prosperous, fiscal policy is one of the government’s efforts to regulate budget balance

  • The results of this study indicate that (1) the balance funds and personnel expenditure have a positive effect on budget imbalances in the Regency/City of South Sumatra Province, but the effect of the balance funds is not significant, (2) economic growth has a negative and significant effect on budget imbalances in South Sumatra Province

  • The results of analysis and testing, Balanced funds have a positive but insignificant effect carried by showed the researchers showed that balanced on budget balance, or based on government budget funds and personnel expenditures have a positive effect theory and research by Anggreni & Sri (2018) an increase on imbalance budget, or in other words, the positive in balanced funds can cause budget deficits

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Summary

Results

The results of this study indicate that (1) the balance funds and personnel expenditure have a positive effect on budget imbalances in the Regency/City of South Sumatra Province, but the effect of the balance funds is not significant, (2) economic growth has a negative and significant effect on budget imbalances in South Sumatra Province

Conclusion
Economic growth has a negative effect on the budget imbalance
Conclusions
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