FORMER Prime Minister Gordon Darcy Lilo has strongly urged the Government to gazette the Public Financial Management Act (PFMA) as soon as applicably possible as a step to dose the country’s current financial situation.
Lilo made the strong statement in an exclusive interview with Island Sun yesterday.
According to the former Prime Minister, if the Government were to gazette the PFMA, there would be a stronger and more transparent slant to boost its fiscal responsibility.
“If we were to gazette the PFMA, we would not be in the situation we are in right now and it would make the Government more responsible,” Lilo said.
The former Prime Minister then added that this was the exact fear he had leading up to the lapse of his term as PM of the previous government.
During Mr Lilo’s tenure as Prime Minister, as part of their fiscal consolidation reform approach, they left behind $127,000,000 worth of cash reserves for the next Government.
“It was part of our fiscal consolidation reform approach that earned confidence of donors to improve accountable cash grants and budget support.
“There is a macroeconomic effect which the Democratic Coalition for Change Government leadership including the Prime Minister and the Minister of Finance failed to see and that is the support on external reserves.
“Sad situation that they decided to completely wipe it out,” the former Prime Minister said.
Citizens have been heavily criticising the Government based on much concern on the unsatisfying services by the Government including the health and education sector.
Mr Lilo told the paper that the country’s current financial crisis is more than just a cash flow issue as cash flow is usually cyclical and is normal to have a pick and trench in its flow.
He added that it is clearly domestic economic mismanagement that is the issue and unless the PFMA is not gazetted as soon as applicably possible, the country’s financial situation will continue to go downhill.
Lilo then further added that the concern is that the Government may turn to the private sector when its reserves and fiscal finances do not go the way they are supposed to and that would be a worse of scenario.
The second issue the former Prime Minister stressed was to not have the Government touch the State Owned Enterprises (SOEs) that are doing well and should help them to financially grow instead.
He then added that Government should also stop negligible borrowing and should do structural reforms and fix its fiscal issue.
“Discretional spending is a classic example and the failed scholarship awards.
“We are awarding scholarships left right and centre and not even based on merit.
“This must be dealt with because it is taxpayers’ money! “said Lilo
Gordon Darcy Lilo then said there are definitely tough times ahead and something must be done to avoid further exacerbating the situation.
“What the Finance Minister said about the country’s finances, I must say, this should be the last time we borrow and the Public Financal Management Act must be gazetted because it promotes transparency and also has elements of anticorruption.
“Stop feeding on our reserves and make hard reforms,” the former Prime Minister said.
Lilo then said he is not trying to point out wrongs in any way, but instead, trying to suggest ways to dose the country’s domestic economic management.
Island Sun then sought comments from the Prime Minister of the Democratic Coalition for Change Government, Hon Manasseh Sogavare yesterday and he told the paper that the country’s cash reserves are still healthy despite critics of the Government.
“We thank his (Gordon Darcy Lilo) government for that.
“The cash reserves are still healthy contrary to what critics of the government are saying,” the Prime Minister said.
In March this year, the Minister of Finance and Treasury Hon Snyder Rini said that the Government cash flow situation was stable.
However just last month he accepted that despite recorded under-spending of 2 percent, the current revenue shortfall of 6 percent as of May 31 is proportionally higher, that resulted in a deficit of $269,820 million.