Friday, November 18, 2011

Budget date rescheduled

Source: Post Courier, November 18, 2011
By JONATHAN TANNOS
HANDING down of the 2012 Budget has been deferred by a week from next Tuesday due to printing problems.
This is according to the Finance and Treasury Departments who yesterday informed all government agencies, media, accounting firms and audit companies of the postponement.
It is understood last minute changes were made by the O’Neill-Namah government to warrant the re-printing of the budget despite passage of an original finalised expenditure bill.
Finance and Treasury Minister, Don Polye, will now hand down the budget on November 29, 2011 which is largely predicted to be passed overwhelmingly by Parliament.
Members of the former government are understood to be supportive of the budget which is based on their original strategy of maintaining balanced expenditure, development and revenue raising programs.
Of priority will be maintenance of the District Services Improvement Program (DSIP) which is considered the Members’ “slush fund” based on the need for Parliamentarians to be seen to be doing something for their electorates.
This year’s DSIP budget totalled K870 million of which next year’s total amount will be maintained.
DSIP is considered an “intervention program” necessary to bring in development outside of the cumbersome bureaucratic system which mainly does not work for rural community development.
Of priority mainly is the “Free Education” policy of the government which will be the single biggest expenditure for the 2012 budget.
Key assumptions though will be based on recognition of the liquefied natural gas (LNG) project as the single and most impacting driver of the economy for the next 30 years.
The Government has already committed to establishment of the Sovereign Wealth Fund (SWF) from funds derived from the LNG project to address the downside macroeconomic risks associated with large scale project which will mainly include mining.
The development budget thought is expected to be K5 billion which is an increase of about K1 billion from this year’s expenditure based on unfulfilled commitments by the government for major infrastructure projects around the country.
It is expected that taxation laws are not going to be radically amended but improvised for complex technical areas.
The Government though is expected to move away from making radical changes to housing rentals which are currently uncontrolled due to pressure from real estate companies.
It is understood real estate rentals will not feature prominently in the budget.

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