Treasury records $20 million weekly revenue collection shortfall on September 1
By Alfred Sasako
GOVERNMENT Treasury recorded a $20 million shortfall in its weekly revenue collection on September 1. As a result, government cheques made out to pay outstanding bills, bounced for the first time, sources told Island Sun yesterday.
This was despite assurance by Finance Minister Snyder Rini that the government’s cash flow crisis was over, the sources said.
Mr Rini reportedly told Parliament at the passage of the 2017 Supplementary Appropriation Bill last week that the cash-flow crisis which the country experienced recently “is not an issue anymore as revenue generation is back on track”.
Parliament passed the $400 million-plus supplementary budget last week.
“With the passage of the bill, the assumption of poor government cash-flow is now water under the bridge and that the government will now be able to shoulder all its financial commitments in priority areas that touch the lives of Solomon Islanders,” Mr Rini reportedly said.
He also said the national inflation rate was “improving to a point that is good for the current state of the economy”.
“The Government has been experiencing cash-flow issues since early this year that resulted in the non-payments of its bills and other financial commitments.
“(This is due) to the slow start of economic activities at the beginning of the year. This is normal, adding the government responded by bringing forward cash from last year to fill the gap.”
Despite Minister Rini’s assurance, skeptics believe the delay in settling outstanding bills from service providers does not speak of a government with a stable cash-flow situation.
“Nothing has changed in terms of improvement in the government’s cash flow crisis. And that is what the government should be telling the public instead of giving misleading information that all is well,” one source told Island Sun yesterday.
According to Ministries, payment of salaries is now the number-one priority for the government, nothing more.
“Salaries of public servants and police and nurses are the number one weekly priority, nothing more nothing less. Any surplus is used to pay other statutory charges,” one source said.
It is understood the government spends between $10 million and $12 million on salaries of public servants.
Salaries of police and nurses cost between $7 million and $8 million a fortnight. Total salaries account for about $20 million.
The cash flow crisis is the result of revenue collection projection, which has fallen way below budget estimates, coupled with delays in getting the Tina Hydro Scheme off the ground as well as the Huawei undersea cable now being dogged by allegations of a $40 million bribe and security issues.
Skeptics say that in view of these matters, the government would continue to live in a hand-to-mouth situation for a long while yet.