ABSTRACT
Public finance is about the revenue, expenditure and debt operations of the government and the impact of these measures. A start can be made by considering the imperfections of the competitive pricing system. Imperfections in the competitive marketing price system leave a vacuum for the community to fill. These are due to the uneven spread of income and wealth leading to deficiencies in allocation, the presence of goods which have strong externalities, and the natural bias of the private sector of the economy towards goods for which it is easy to collect payment. If income and wealth is unevenly spread, deficiencies in allocation will occur. These deficiencies in allocation provide one reason for State intervention. Government provision and legislation forms the backdrop of a public finance study. Government provision out of general taxation or transfer payments, such as pensions, are an obvious way of supplementing income deficiencies.
