What does interperiod equity relate to in the context of government services?

Interperiod equity is a principle that focuses on ensuring that the financial resources used for government services in a given year are matched by the revenues generated in that same year. This concept is rooted in the idea that current taxpayers should bear the cost of the services they receive, rather than shifting the financial burden to future taxpayers. By ensuring that current-year revenues adequately cover the costs of current-year services, governments can maintain transparency and accountability in their financial practices.

This approach helps prevent the accumulation of debt that would need to be addressed by future generations, fostering a sense of fairness and responsibility in governmental financial management. It ensures a balanced budget within a fiscal period and promotes sustainable fiscal policies that contribute to the overall economic health of the government entity.