Sayed-Khaiyum clarifies budget spending
October 9, 2021 4:10 pm
Minister for Economy Aiyaz Sayed-Khaiyum and National Federation Party Leader, Professor Biman Prasad.[File image]
The Minister for Economy has clarified that the government’s revenue had increased beyond expectation because of some of the budget support it got.
This after politicians including the National Federation Party Leader, Professor Biman Prasad, claimed that the $484m that was recovered from the 2020-21 National Budget is a clear indication that government ministries and entities under-spent their allocations.
Aiyaz Sayed-Khaiyum explains the government never used the word ‘savings’ and the interpretation by the politicians is wrong.
The Minister explains that money is moved from one sector to another, which is called ‘virement’ by looking at the current economic situation.
“So, for example, when the borders don’t open up, and schools aren’t in place, there are certain amounts of money or allocations that won’t be made. So whether it’s to do with the TELS because some people weren’t going to university, so we’re not going to pay people allowance when they’re not going to university.”
Sayed-Khaiyum says with some smart work, the Ministry of Economy saved around $60 million in interest.
“I mean, we did not spend that much money. So there were salaries and wages, about $44.4 million because we did not have any new recruitment’s. As we said, we went to sharpen our skill sets and our pens in that respect. Transport infrastructure investment sector project is about $62.7 million that we had budgeted, but we actually not spend it, obviously, tertiary education loan scheme, as I mentioned in toppers, $46.5 million, the tourism marketing grant, as you know, we had allocated that, but the borders did not open. So obviously you’re not going to spend that much money.”
The Attorney General says the NFP Leader has a misconception about the budget.
Meanwhile, Professor Biman Prasad has declined to respond to the comments made by the Attorney General.
Acting Permanent Secretary for Economy, Shiri Goundar has also clarified on the Ministry’s website that the favourable fiscal performance relative to the Budget was largely due to a $469.4 million over-collection in Government revenues, 28 percent higher than the budget and a tight restraint on public expenditures resulting in a $485 million under-spending.
Goundar says the significant over-collection in Government revenue is attributed to $210 million non-tax cash inflow from the divestment of Energy Fiji Limited shares which was not initially included as part of revenues in line with our conservative revenue estimation strategy.
He adds this was further supported by the over-collection of $254.7 million in budget support grants from our development partners mainly Australia, New Zealand and the European Union.
However, tax collections were slightly below forecast due to the disruptions caused to business and economic activity following restrictive measures imposed aimed at managing the second wave of COVID-19.
Goundar says the under-spending of $485 million was a result of the tight control on public spending and the under-utilisation of certain budgetary allocations due to the prevailing circumstances during the financial year.
He adds the highest under-spending was recorded for interest expenditure due to the lower than expected cost of borrowing in the domestic market and access to concessional debt from external multilateral and bilateral development partners like the Asian Development Bank, World Bank, Asian Infrastructure Investment Bank and JICA.
Goundar highlights the public wage bill was also lower than the budget as a result of the tight control on civil service recruitment while the COVID-19 induced restrictions caused some delays in capital projects, tertiary education spending and tourism marketing.
During the fiscal year, he says the Government also undertook a redeployment of $61.2 million in line with Section 22 of the Financial Management Act 2004.
Redeployment is the movement of funds from one Head of appropriation to another Head of appropriation.