Public finances across the OECD are under strain, and the room for delaying action is narrowing. High public debt, ageing populations, rising defence needs and the growing cost of extreme weather events are no longer distant pressures. They are shaping fiscal choices today. Recent shocks, particularly the energy crisis and the surge in living costs, have further stretched budgets while heightening public expectations of government support.
This moment exposes a deeper challenge. Governments are being asked to manage long‑term fiscal risks in an environment where public trust is fragile and tolerance for trade‑offs is low. Emergency measures have helped protect households, but repeated reliance on short‑term fixes risks eroding confidence in governments’ ability to act with a clear direction and a long‑term purpose.
OECD analysis shows that trust weakens when citizens do not understand why reforms are needed, how costs and benefits are shared, or how today’s decisions fit into a longer‑term strategy. At the same time, delaying action on long‑term challenges only increases the scale of future adjustment. This creates a dangerous cycle: hesitation fuels mistrust, and mistrust makes action harder.
These pressures are magnified by a rapidly changing communications landscape. Fragmented media environments, declining trust in traditional intermediaries and polarised online debate make it harder to sustain attention on long‑term fiscal challenges and to explain why difficult choices are unavoidable. In this context, even well‑designed reforms can falter if citizens do not recognise themselves, their concerns and their futures in government narratives.
Breaking this cycle is now central to both restoring public finances and rebuilding trust. Fiscal sustainability is not only a technical question of rules and institutions. It is also a political and social challenge that depends on whether people believe governments are making difficult choices transparently, fairly and with future generations in mind.
This report outlines that modern budgeting must place public understanding at its core. Budget processes, communication strategies and oversight arrangements all need to work together to explain fiscal realities, clarify trade‑offs and give citizens a meaningful sense of voice. Doing so does not remove the difficulty of reform, but it can make reform more durable.
The report sets out four practical pillars to support this shift: demystifying the budget for key decision makers; communicating public finances clearly; fostering genuine citizen engagement to build legitimacy; and transforming independent fiscal institutions into proactive fiscal advocates. Together, these pillars offer a way to anchor fiscal policy in long‑term thinking while retaining public confidence in periods of economic stress.
The choices facing governments are increasingly shaped by long‑term forces that do not wait for electoral cycles to catch up. By investing now in public understanding, countries can reduce the risk that policy is paralysed. They can rebuild trust in public institutions, and create the conditions needed to secure their public finances for the years ahead.