A $4.1 BILLION BUDGET FOR SOCIAL SERVICES, RURAL INFRASTRUCTURE AND RURAL DEVELOPMENT ACTIVITIES
TUESDAY 6TH DECEMBER 2016
Minister of Finance and Treasury, Hon Snyder Rini announced this when
He said, “Sir the Budget that I present today will deliver a record $4.1 billion in spending to social services, rural infrastructure, rural development activities and key programs to provide both quality and coverage of public investments to our people.”
He said it will enable ministries to maintain essential services for our people and lay foundations for future growth for the nation.
Hon. Rini informed the House of where Government will source revenue to fund this budget, which is a combination of domestic revenue, external budget support and cash reserves that successive Governments have built up over recent years.
With these revenue sources, he assures that the 2017 budget is in a fiscally sound position.
Hon. Rini continue to say that total revenue for 2017 is expected to hit $3,909.2 million, where total domestically sourced revenue is expected to be at $3,555.3 million, an increase of $577.3 million ( or 19.6 per cent) over the 2016 Revised Budget Estimate.
Domestic revenue is expected to be sourced from the following:
The Government expects an estimated donor support of $283 million, including $80 million in general support from the Asian Development Bank and the World Bank.
On the expenditure side, the Government is budgeting to spend $4,087.6 million. This is made up of $2,906.8 million for recurrent expenditure and $1,180 million for development expenditure.
Of the recurrent expenditure of $2,906.8 million, $2,622.9 million will be on recurrent operations of which Payroll will be $1,028.5 million. Other charges $1,594.3 million and donor budget support for recurrent operations $283.9 million.
He further added that Government also plans to spend $1,180.8 million in major strategic investments, which comprises of $1,110.8 million from domestic sources and $70.0 million from donor development assistance, principally the Republic of China.
91 percent of the recurrent and development budget expenditures are funded by domestic sources, while 9 percent from the donor community.
Hon. Rini said, to enable the Government to continue provide services and undertake productive infrastructure projects that are not provided for in the primary allocations, there are provisions in the Appropriation Bill that the Government may utilize.
He finally added that the 2017 budget provides for $85 million recurrent and for development contingency warrants. Expenditures for which are at this time unforeseen and are not factored in the budget.
It also set a borrowing limit of $900 million and an advance warrant limit of $200 million.
The Finance Minister reminded the House on the use of Contingency Warrants, that these are for unbudgeted or unforeseen expenditures, such as national emergencies and disasters, but also for ensuring we have fiscal buffers.
“Such funds, Sir, maintain the continued and unhindered implementation of services, whilst accommodating for sudden ‘one off’ or ‘off budget’ requirements. This is consistent with the purpose set out in the Constitution,” he explained.
In executing and managing the 2017 Budget, the Finance Minister lists several measures that Government will implement in 2017 to strengthen the alignment of government’s priorities to the allocation of our scarce resources through the budget to maintain its credibility.
Unlike 2015 and 2016 Budgets, the level Government cash reserves required to balance the 2017 Budget will be reduced significantly to $178.4 million. This demonstrates not only Government’s commitment to refocus expenditure to key infrastructure and priority spending but also shows Government’s intention to maintain and rebuild its cash reserves at a sustainable level.
Hon Rini told Parliament that our Budget is only as good if they are implemented.
The Finance Minister announced that the 2017 Budget is the first step in delivering the National Strategic Goals, which will be finalized by the end of this year.
The 20 years National Development Strategy (NDS) – 2016 - 2035 has been approved and launched in April 2016. It presents the overall vision and long term development objective that aims to improve social and economic livelihoods of all Solomon Islanders, through a return to economic growth by delivering on the following objectives:
Hon. Rini said the 2017 Budget focuses on these areas, but new projects take time to design and effectively implement. So over the next 2-3 years, greater focus will be given to developing and implementing projects that provide infrastructure in rural areas and which help create the environment for sustained economic growth.
To this end, he said his Ministry and the Ministry of Development Planning and Aid Coordination (MDPAC) will ensure that all programmes and projects that are included in the Budget, going forward, must be ready for implementation and properly costed so that they are completed successfully on time within Budget.
He concluded that MDPAC and his Ministry are working with all ministries to improve proper budget planning and prioritization and compliance with budget instructions for both formulation and execution.
Meanwhile, the 2017 budget is drop by $0.1 Billion compared to the 2016 budget which was $4.2 billion.