Budget funding requests top record $1 billion
For the first time in history Ministry funding requests for the next budget will exceed a whopping $1 billion tala, internal projections obtained by the Samoa Observer show.
Ministry of Finance Chief Executive Officer, Leasiosiofa'asisina Oscar Malielegaoi, confirmed on Tuesday the figures contained within the minutes of a pre 2020-21 Financial Year budget C.E.O. forum held a fortnight ago.
But Leasiosio did stress that the said total bids made by Government Ministries will undergo a review before a final figure is revealed in the 2020-2021 budget.
Last year, the Government's passed budget for 2019-2020 amounted to $913.6 million tala.
Leasiosio said yearly budgets are expected to grow with the size of the nation: "Every year the C.E.O.s have a forum and that forum is the last opportunity given for the C.E.O.s to discuss their forecast for the next financial year as well as cutting down expectations
"Remember our budget was $913.10 million; $746 million was spent on Ministry expenditures plus the budgets funded by loans and grants, that's where we got the $913 million.
"The expectation every year is that the budget grows because population grows and new Ministries and many added in the workforce, we take on new mandates and they all incur costs.
"Maybe next year, they will bid a total of more than $1.1 billion."
Should the budget decrease, it means there have been projects completed, he added.
"Every year it grows but, when there is a reduction, it is not because there is less money in the Government but it is because there are projects being wrapped up,” the Finance chief said.
Leasiosio explained that the review of the bids tabled by Ministries are performance-based.
The Ministries are given the chance to present their budget bids but the amount of money they receive will be based on their key performance indicators (K.P.I.).
"If these Ministries ask for $1.1 billion, then we sit down and scrutinise properly which Ministries performed, which provided a realistic work plan for next year, and performed [last year], then why not, we give extra resources," Leasiosio said.
"Then there are Ministries that did not perform and do not deliver their K.P.I.s and ask for more, then we cut.
"And that's one of the reasons why we cut down bids. If they do not perform but ask for more, we slash what they ask for."
The M.O.F. chief says another reason for cuts in bids is to be realistic with the revenues coming into the economy - of which 90 per cent is collected by the Ministry of Customs and Revenue and the remainder by other Ministries.
He added that if a Ministry does not increase its revenues, their budget bid may also be decreased.
"It's like saying, how much you eat depends on how much you are given and your outfit sewn depends on the material available," he said.
Apart from beneficial bodies, such as the National University of Samoa and Samoa Qualification Authority, commercially run enterprises are also included in the budget for their Community Service Obligations.
The total budget support revenue forecast tabled by Ministries during the Pre-Budget C.E.O. meeting was $642 million tala.
Leasiosio said this is not the final figure.
Asked whether he had confidence that the economy would be strong enough to sustain the required revenue support, considering it is already projected to be reeling from the measles epidemic and coronavirus, Leasiosio said he was confident that the newly-launched Tax Invoice Monitoring System and increased compliance by Ministries.
"Despite global crisis with measles and such, we cannot back down," he said.
"There is no reason why the Government should be stopped, especially the Ministry for Revenue to seek out every single cent because in the budget, all cents are important.
"This is why enforced the vehicle policy because if we cannot spare a cent from there, how can we fund Government projects, so we need every single sene."
Leasiosio had also shut down speculations that the Government has left most of the work until election year.
"Even if it is election year or none election year, the budget increases every year," he said.
"And ongoing projects started from years 2016, 2017, 2018, and roads are opened every year and school building projects are spaced out and opened every year.
"We depend on our projects on our cash flow and our financial position and not because we leave everything till the last year."
But the minutes of the pre-budget forum did reveal that Finance would clamp down on some spending measures.
All Government travel via Asia is to be cancelled; travel to Fiji and Hawaii will now be re-routed by Auckland and American samoa; the pre-release of goods is to be prohibited and tea and biscuits will become the default catering option for all Ministerial functions.
All requests for transactions on behalf of state requests will also require Cabinet's approval for all new initiatives.