Former Finance Minister predicts Vt1 billion deficit

Former Minister for Finance MP Willie Jimmy has predicted that the Government Budget for his year will hit the Vt1 billion deficit mark by December 31, 2015.

He says the Government Budget operates within a calendar year from January 1st to December 31st each year.

The revenue forecast for each year is calculated based on the current business investments and other economic activities to be established in the next 12 months within the budget calendar year.

While acknowledging Government Public Relations Officer Kiery Manassah’s comment in DP Issue No. 4936 about Government initiative to strengthen compliance, expecting to collect extra revenue to meet the shortfall of Vt900 million deficit left by the suspension of the Hong Kong Capital Investment Scheme, MP Jimmy says the Government and members of the Task Force must explain to the members of Parliament what went wrong in law that caused the suspension of the PRG Programme that will now affect the Budget.

MP Jimmy says he was present when the Chairman of the Task Force, Commissioner of the Vanuatu Financial Commission, George Andrews, in two separate briefings, enticed MPs to believe in an increase of Vt10 million in Parliament Allocation Funds per MP, for them “to agree to the major changes in our National Constitution in order for these Projects to be fully implemented”.

The MP does not believe that the Government would be able to collect extra revenue from Government State Own Enterprises (SoEs) to cover the predicted deficit amount.

He says, “The Government through the Ministerial Budget Committee and Minister of Finance Budget Speech during Budget Session in December last year had incorporated the Government’s revenue forecast based on the foreign funded projects namely the Port Vila Urban Infrastructure Development, Lapetasi Wharf and Malekula and Tanna Road Projects.

“Recently the Director of Project Management Programme Mr. Johnson Wabaiat came out to announce the Lapetasi Wharf Construction work to begin in July of this year 2015. The revenue forecast to be collected from this project alone for the first 6 months is already a great loss to the Government Budget, a complete write off”.

In addition MP Jimmy says, “If the Port Vila Urban Development, Malekula and Tanna Road Projects continue to delay further to the end of this year, the Government will face huge financial deficit and will have no choice but apply delaying tactics to settle a lot of its outstanding debts and claims and will definitely suspend a lot of its essential services causing the innocent people to become victims in such a situation.

“On that note, I call on our foreign donors responsible for the funding of these projects to respect budget operation period by processing their projects in time and have them implemented within our financial budget framework”.

The MP is convinced that revenue expected from those aid donor funded projects will not benefit the 2015 budget.

“The 2016 to 2020 budget will benefit from the revenue expected to collect out of Port Vila Urban Development, Lapetasi Muti-Purpose Wharf, Tanna and Malekula Roads and Luganville Main Wharf Constructions,” he says.

Furthermore he claims economists in Finance and the Reserve Bank have misled the Government by exaggerating revenue based on the foreign funded projects in the 2015 revenue forecast.

“This is the problem we face when we rely on revenue from foreign aid, because they implement their projects at their own time, which is totally outside our budget operating period of one calendar year”, he says.

MP Jimmy says the way forward in future is for the country to become less dependent on revenue foreign aid funded projects, and “open up our doors of investment opportunities to foreign and local investors alike”.

He stresses, “Government must be vigilant in its policies to grow the economy through appropriate legislations that are conducive to grow investments beginning with a review of the new Land Reform Act and Kastom land Management Act, which slow down interests to invest in the country at present.

“Any Government now and in future cannot increase productivity of any of our products with the current Land Laws in place”.