In the National Assembly | 10 October 2019
Government seeks R310 million as supplementary budget
The finance ministry, through the leader of government business, Charles De Commarmond has brought a motion in the National Assembly seeking approval of a supplementary budget of R310.3 million.
Mr De Commarmond, informed parliament yesterday that the government is looking to use the R310.3 million to finance the government’s new priority areas identified in the medium-term review.
The R310.3 million will come from a budget cut of R435.9 million from the 2019 budget approved by the National Assembly last year.
This means that a sum of R125.6 million will remain from the budget cut.
Providing a rationale for his motion, Hon. De Commarmond explained that a review has shown reduced revenue compared to the projection made in the 2019 budget.
He noted that this is primarily due to the property tax which did not come into effect this year like it was forecasted.
There has also been a reduction on the projections made for non-tax revenues.
“These reductions have been projected to amount to a sum of R118 million for 2019. The government’s fiscal target remains a surplus of 2.5%, which is important for the government to retain its targeted debt-to-GDP ratio at 50% by 2021. Therefore the government’s expenditures needs to be re-adjusted given the reduction in revenue for it to continue to attain a fiscal target of 2.5%,” Hon. De Commarmond explained.
“The government has introduced various measures for it to attend the surplus, some of which are to impose a freeze in recruitments excluding priority sectors; reduce the budget in goods and services in some ministries, departments and agencies; reprioritise expenditures to finance priority projects that were identified in the mid-year review and identify savings in projects or programmes that were not being realised and re-route these funds to other areas.”
Given that budgets are appropriated by budget heads, the government cannot take from or increase a budget head unless it receives approval from the National Assembly.
Overall the government has cut more than R60 million as salary which has gone into the R435.9 budget cut which has been made possible due to the government’s freeze on recruitment.
R62 million is being recommended as a budget cut for goods and services and R169 million in budget cut for capital projects that will not be completed in 2019 whilst R27 million will be reduced under the government’s social programme since not all will be used in 2019.
Other recommended budgets cuts include:
- R82 million from net lending
- R23.7 million for SPTC and Public Utilities Corporation (PUC) foreign loans
- R10 million from VAT exemption claims
The supplementary budget expects to re-allocate R8.8 million as salary and dues to the department of culture, Procurement Oversight Unit, Anti-Corruption Commission, Truth, Reconciliation and National Unity Commission and Seychelles Broadcasting Corporation (SBC).
A sum of R35 million will also be re-allocated to the department of culture, Seychelles Human Rights Commission, Truth, Reconciliation and National Unity Commission, Agency for Social protection (ASP), Agency for National Human Resource Development (ANHRD), Seychelles National Youth Council (SNYC), SBC under the heading goods and services.
Meanwhile R146 million is to be reprioritised in the supplementary budget for capital projects for the Ministry of Finance, Trade, Investment and Economic Planning; Ministry of Fisheries and Agriculture; Ministry of Education and Human Resource Development; department of infrastructure; department of local government; department of culture; Seychelles Land Transport Agency (SLTA) and Enterprise Seychelles Agency (Esa).
The supplementary budget will also provide government subvention of R25.2 million to Air Seychelles and the Seychelles Public Transport Corporation (SPTC).
Other recommended supplementary budgets include:
- R63.3 million for benefits and approved programmes under ASP. This will go towards people benefitting from the home carer coverage, disability benefits, welfare assistance and unemployment relief scheme.
- R4.7 million for subscription to international organisations.
- R25.8 million to Property Management Corporation (PMC).
Debate surrounding the supplementary budget began yesterday and will continue today.