By Gary Hatigeva
THE government has yesterday revealed its much anticipated Budget for 2018, with high esteems to see that it is felt at all levels.
Finance Minister and Deputy Prime Minister, Manasseh Sogavare following the second reading of the Appropriation Bill 2018, delivered almost an hour of the Budget Speech where he highlighted to be a credible, fully funded and balance, while at the same time fiscally responsible and grounded with the government’s policy priority as far as finances are concerned.
With a number of Key Guiding Principles, the 2018 according the Finance Minister outlined that the number one policy priority for the 2018 National Budget is to focus on creating fiscal stability and re-establishing fiscal buffers to ensure that execution of the budget is efficient and effective.
He said the second priority for the 2018 Budget is to ensure it is targeted to the priority policy areas of Government within a stable macro-fiscal framework.
“Given the total resource envelope for 2018, $26 million has been ring-fenced for unforeseen spending under the Contingency Warrant provision.
“The $26 million will also act as a contingency reserve to assist the Government with additional cash buffers against any potential revenue shortfalls,” he explained.
He added that it is also to ensure that the government’s commitment in 2017 is maintain, with around $138 million of outstanding arrears from 2017 fiscal year was transparently secured and budgeted for within the 2018 total resource envelope and to be addressed in the first quarter of 2018.
The Budget according to Sogavare also wants to ensure 2018 resource envelope is realistic, that the Ministry of Finance and Treasury through the Economic Reform Unit will work on a more realistic and credible macroeconomic forecasts and estimates than in previous years because of the use of a 2017 full years’ worth of actuals for forecasting revenue collections this year.
He further added that the guiding principles are created with intentions to support the smooth and effective execution of the budget for 2018.
“At the same time created better cash management so that Ministries receive the right amount of funding at the right times, the budget has been allocated across and between the Recurrent and Development Budgets based on what each Ministry can realistically deliver for this year.
Meanwhile, he pointed out the as for the Recurrent budget, it was determined based on costed activities and deliverables for 2018 and the Development budget was determined by projects that are ready to be delivered successfully, which witnessed the adjustments of allocations for their implementation programs.
He however revealed that most of the cuts done are to ensure that projections are realistic and credible, which he therefore stressed that all budgetary allocations have to be supported with some assurance that the resources targeted will be delivered successfully.
“It is important that ministries must demonstrate and justify that they have the technical capacity, man power and time to complete the projects. Even if ministries used up funds before the end of the year, proper implementation reports must be provided before further consideration can be sought from the government for additional funding.”
“It is crucial that funds are used properly to deliver key government priorities by the end of this year and that we only secure funding for projects within a tight fiscal framework that have contractual commitments,” the Finance Minister explained.
In the process of the Public Accounts Committee (PAC) hearing, most ministries complained that the cuts on their allocations are quite overwhelming and could threaten their programs for implementations.
Sogavare on the other hand agreed that the measures taken will certainly hurt some ministries but suggested that without the actions outlined, the government risks increasing its fiscal deficit to an unsustainable level, losing its credibility amongst stakeholders.
He also added that without actions, the country will also risk losing the support and cooperation of taxpayers and the private sector at the same time could jeopardize the country’s long-term economic growth.
“For well-being of future generations, we have no choice but to take bold actions beginning today,” the confident Minister of Finance stressed.
He then detailed that the budget presented will deliver $4.068 billion in spending to provide the services to the people of Solomon Islands.
However, he suggested and reiterated that unlike in the previous budgets since 2015, the current government now provides $26 Million in the budget to cover the potential for unforeseen and unexpected needs that may arise in the course of the 2018 fiscal year.
Meanwhile, Finance Minister Sogavare reminded that the current the current house only has nine months before its dissolution and that the momentous work ahead to take this country to new heights is still enormous.
“So let us all therefore work responsibly and cohesively together, target our resources more strategically to where there is greatest need and greatest value, and focus our efforts to transformative sources of economic growth and in creating a lasting difference to the lives of our people,” Sogavare urged.