Budget preparations on target: finance chief Leasiosio
The delay in the Government formation process has not interrupted preparations within the bureaucracy for the 2021-2022 budget, which would be the first money plan for the XVII Legislative Assembly.
In an interview with the Samoa Observer, the Ministry of Finance, Chief Executive Officer, Leasiosiofa’asisina Oscar Malielegaoi said they are following process of compiling the budget.
“It is almost done, once it’s completed its submitted to Cabinet whoever Cabinet may be and once they approve it goes to parliament," said Leasiosio.
“So we are on track to meet our usual timeline for budget preparations and we maintain that timeline to prepare and have it ready before the end of May.”
Asked what happens if the Parliament does not rise by May to discuss the budget, Leasiosio replied that that is an issue beyond their mandate.
“As I said our focus now is to prepare and finalise the budget,” he said. “There are legislations and regulations, options should that event [occur] because we have to pay doctors, teachers, supply medicine, pay N.E.O.C. and accommodate all those costs.”
In preparing the budget, Leasiosio was also asked about the input of the caretaker Government in that process.
He insisted that their work is to meet the deadline and it is the normal process and procedure every year, regardless of whether it is election period.
Part of the preparation work is for the M.O.F. to meet with all the Government agencies chief executive officers to give an aggregated picture of the new financial year.
“As mention our role of the Ministry of Finance is to prepare the budget, submit to Cabinet then to Parliament and once it's passed that triggers the financial year,” he said.
Leasiosio then made it clear that the Ministry cannot submit the budget directly to the Parliament.
“Mind you the budget is a 12 months process. Once activate new financial year budget on 1st July that is the window we start preparations for the other next budget. It’s a 12 months cycle we follow the process.”
The Head of State, His Highness Tuimalealiifano Va’aletoa Sualauvi II expressed concern about the ability of the new Parliament to pass the budget to enable the Government to function.
In his proclamation to declare a snap election and void the results from April’s polling day, he said as politicians go about their political affairs the operation of the Government remains uncertain.
He noted since polling day there has been a deadlock in the 52 seats of parliament between the two dominant parties with the additional seat for women before the Court for determination.
“By June 2021, the financial year 2020/2021 will come to an end and with it the ability of Government to pay salaries of its employees, meet its expenses and pay for services- including essential services such as health and education,” said His Highness.
“If the 2021/2022 budget is not tabled and passed, it will have overreaching effects on the everyday functions of Government, including its ability to respond to the Covid-19 pandemic and sustain its current responses.
“There must be in place by June 2021 a Parliament to pass the 2021/2022 budget in order for Government to carry out its usual fiscal responsibilities.”
The Head of State added a delay in forming the new Parliament may affect the regional and international responsibilities and effectiveness of the partnership arrangements.
When Leasiosio was asked about whether the delay in forming Government will impact on funds, he replied the funds for most of the major projects have been committed.
An example he used is the road extension project in Vaitele to Faleolo which has already been approved while the funding is released in phases.
He said even with bilateral partnerships most of the programs are multi-year projects that are already committed.
Furthermore, he made it clear that the grants for projects such as the completed Vaisigano bridge and Vaitele road extensions are priorities for the Government of Samoa.
He dismissed reports that suggest donor partners are funding certain projects for their own interests.
“Like the Maliolio bridge in Savai'i that project was a priority from the Government because of incidents that occurred from there,” he said.
“These projects are the Government of Samoa’s priorities not the donor partners. We set the priorities and the donors responded in good faith.”
So what we expect from the main budget for 2021/2022 financial year?
Leasiosio said the announcement will come from the Minister of Finance but has assured that as per previous announcement there is a third stimulus package on the agenda.
“The third stimulus is in the spirit of continue the stimulus package,” he said.
“Before we reopen the borders and have tourists there is a lot of work that needs to be done to prepare us for that,” he said.
“We are looking at injecting something to stimulate the economy.
“We do have fiscal target which means there are legislations to control our budget for example our total debts that has to be below 50 per cent and we have already achieved that and our total debt is 47 per cent compared to the size of our economy…”
The Government announced a $83 million second stimulus package in May last year to help the country’s private sector battle against COVID-19.
The Phase II response plan (second stimulus) includes a number of measures for injecting cash directly into the economy targeted sectors that were hit by covid downturn especially tourism.