Recurrent budget down by $272m

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Minister of Finance and Treasury Harry Kuma
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By EDDIE OSIFELO

MINISTRY of Finance and Treasury has reduced the Recurrent Budget by $272 million in this year’s budget.

In 2020 budget, the recurrent budget was $3.082 billion.

However, this year, the government reduced it to $2.810 billion of the $4 billion budget.

This consists of payroll budget estimates of $1.290 billion and $1.520 billion for Other Charges.

Delivering his budget speech in Parliament on Tuesday, Minister Harry Kuma said the reduction reflects planned reductions in Other Charges budget as outlined below:

  1. Overall reduction by 40 percent on all ministries’ discretionary and non-essential line items except for productive and resources sectors ministries.
  2. All fixed costs are protected except all grants, which are reduced by 15 percent.  Utilities are also reduced by 5 percent.  Ministries are asked to manage at reduced amounts and impose stringent control measures on the usage of utilities.
  3. Scholarship budget is reduced by $120 million.  No new overseas scholarships will be considered in 2021   except for in country scholarships. Allowances and other allowances will also be reviewed and considered at reduced amounts during the year.
  4. All overseas-related travels have been reduced, as Government will not allow overseas travels in 2021 until we complete the vaccination roll out programme, and allow travel and trade activity to normalise.

Kuma said the 2021 budget is a very tight budget and the government will need to realistically plan and prioritise its activities in order to achieve tangible outcomes within the 2021 financial year and avoid any commitments that will further derail government’s fiscal situation.

“In this regard, the government has taken a drastic decision to reduce overall SIG expenditure from normal SIG revenue sources in order to maintain fiscal stability and affordability of the government fiscal plan in 2021.  

“This is to ensure funding is always readily available to pay all government suppliers on time,” he said.

Furthermore, Kuma said the government’s overall policy redirection plan is to manage payroll costs in 2021 and continue with current ongoing public service reforms.

Moreover, he said the government has already imposed a recruitment freeze across the whole of Public Service and this is effective as of 2nd January 2021.

He said in spite of the overall freeze on new recruitment, the government through the Ministry of Public Service will consider and redirect vacant positions in its strategic areas of policy priorities, especially in both the productive and resource sectors, including essential services.


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