What does a Minister of Finance do?
The minister of finance is a member of a government cabinet and director of the ministry of finance. The responsibilities of the office include advising the head of the government; managing the budget, taxes, and funding for programs; addressing domestic economical growth and policy; and handling international financial matters. Other titles for the position might be finance minister, secretary of the treasury, chancellor of exchequer, or financial secretary. Every country has someone in this position, no matter what the title is.
This position is very important. A country's standard of living is closely related to the decisions that the minister of finance makes or recommends. One of the minister's priorities is the government's budget, which is made up of two things: revenue and spending. This is called fiscal policy. Fiscal policy affects interest rates, bank regulations, unemployment, operation of private businesses, and inflation of currency.
Taxes are the main source of revenue for most governments, but there are multiple avenues for spending. If a government is to have lower taxes, it must eliminate some government programs, reduce salaries, and curb its standards of operation. A government that wants to increase programs and grants must raise taxes or other fees.
The minister of finance has to find a balance, funding necessary programs while minimizing the burden on the taxpayer. Often, this position makes him or her an unpopular public servant, but his or her decisions affect all citizens of the country. The actual power of the office varies from country to country. Some countries might leave the ultimate decisions up to the head of the government or to the legislative body, and others allow the minister to enforce decisions.
When the government does hold public funds that are not considered taxes, the minister of finance acts as the trustee of the funds. Retirement, medical disability, and welfare programs are all paid by working citizens, but they are not technically considered taxes. The minister acts as the trustee of these programs, ensuring that they are properly maintained.
If the government plays a major role in business by using taxpayer money to fund organizations such as healthcare facilities, schools, and financial institutions, the finance minister has a great deal of power. He or she might be second only to the prime minister. In countries that have limited government involvement in business activity, this job might be considered a minor government position that holds little power.
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