Thu, 20 July 2017
Last Updated: Thu, 20 Jul 2017 9am
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We need robust budgeting processes

I RISE to contribute briefly to the debate on the 2016 Appropriation Bill 2017 on behalf of the Parliamentary Opposition Group and my Constituency of Hograno/Kia/Havulei.

Mr Speaker, in so doing let me first of all thank my good friend the Minister of Finance and Treasury for tabling the 2016 Appropriation Bill 2017.

I also wish to acknowledge the Public Accounts Committee for its report on the Bill, as contained in National Parliament Paper No 6 of 2017, and I associate myself to the statement just delivered by the Chairman of the Public Accounts Committee.

Sir, as the Minister of Finance and Treasury expressed in his statement the object of the Bill is very clear and that is to regularize a total of $92,243,517.00 spent during the last two quarters of 2016, of which $49.7 million was for expenditures under Contingencies Warrants, and $42.5 million was for expenditure under Advance Warrants.

Sir, as we know these are funds that have already been spent.

I also acknowledge and note that this Supplementary Appropriation Bill does not supplement additional expenditures.

Mr. Speaker, I wish to make a few general comments and observations on this matter of supplementary appropriations and the budget process in general.

Sir these comments and observations are not new.

I and others including the Prime Minister when he was on this side of the House have made these same comments and observations during the past.

However, it seems that nothing has changed, if anything it is getting worse in terms of the use or abuse of contingency warrants.

Mr Speaker, I know and understand that this is not a perfect world.

I also acknowledge that section 102(3) of our Constitution and section 51 of the Public Finance Management Act provides the legal basis for the Minister of Finance and Treasury to bring supplementary appropriation bills to Parliament during the course of any financial year for urgent and unforeseen needs to be funded under contingency warrants.

However, Mr Speaker, I think we have abused to some extent these legal provisions over the years.

While, contingency warrants are meant for urgent and unforeseen expenditures, a good number of contingency warrant expenditures that appear in supplementary budgets over the years including in this bill are not urgent and unforeseen in nature.

They could have been included in the budget proper for that year.

They are not really urgent and unforeseen expenses. They may be urgent but not important. Not everything that is urgent is important.

Sir, this means that our planning and budgeting processes are not robust enough.

We need to strengthen the link or cycle between policy, planning, budgeting, implementation, monitoring and evaluation.

Sir, the Central Government Ministries of the Office of the Prime Minister and Cabinet; the Ministry of Finance and Treasury; the Ministry of Development Planning and Aid Coordination; and the Ministry of Public Service must take charge in coordinating and resourcing government line ministries to implement Government policies through the budget.

I therefore support the recommendation in the PAC report that we need qualified planning and budgeting personnel in all our government ministries.

This is to ensure that budget bids that are submitted to MDPAC and the Ministry of Finance and Treasury are properly costed and in line with the policy priorities of the Government of the day.

Mr Speaker, equally important is the need for political direction from the responsible cabinet ministers to guide their respective ministries in planning, formulating, and implementing the budget according to the Government’s policy intentions and programs.

Sir, I believe this political direction is lacking since some Ministers hardly turn up for work, or they simply do not understand the work of their ministries.    

Mr Speaker, a robust planning and budgeting process also means that the annual budget consultations must be participatory and inclusive of all government agencies including our provincial governments, SOEs, the private sector and rural communities where possible.

This is to enhance our peoples’ ownership of the budget, as well as, help the Government to manage the expectations of our people in terms of the Government’s capacity to deliver goods and services in any given financial year.

I guess such a consultative and participatory approach could also minimize the use of contingency warrants in Supplementary budgets.         

Mr Speaker, I will now comment on specific allocations in the Bill.

As outlined in the Bill, $12.7 million was expended through contingency warrant under the Office of the Prime Minister and Cabinet to cater for office operational costs, grant and subvention to the Kolombangara Development Advisory Committee; and for hosting of the Pacific Islands Development Forum Leaders’ Summit in Honiara.   

Sir, I believe the KDAC is basically another Cabinet Sub Committee since it is being chaired by a Government MP or backbencher.

If so its operational costs should not be treated under the subhead of grants and subventions but under the same subheads that the other Cabinet sub-committees come under.

Strictly speaking Government grants and subventions are normally given or allocated to SOEs, and other entities or projects outside of the government.

We may have to create a new accounting code under the chart of accounts to cater for the funding allocations to Cabinet Sub Committees.

In addition, Sir, I have yet to see a single report produced by the various Cabinet Sub-Committees established by the DCCG Government.

Sir, when will these reports be ready?

I understand meetings and consultations have been undertaken since 2015 and 2016.

I urge the Government to table these reports in Parliament as these Committees cover important sectors and programs in our country such as RIPEL; DBSI; Gold Ridge and so forth.

Otherwise, such committees including the Kolombangara Development Advisory Committee are essentially established for political expediency.

Mr Speaker, in terms of the Pacific Islands Development Forum (PIDF), I subscribe to the recommendations of the Public Accounts Committee that the Parliamentary Foreign Relations Committee review our affiliation to or membership in the PIDF.

I understand that membership subscription to the PIDF is on voluntary basis, but we are spending huge amounts of money in attending and hosting PIDF meetings.

Sir, we therefore need to ascertain the benefits we are getting in return from the PIDF.

How do we benefit or what benefits do we get from the PIDF?

Does the PIDF help to advance our national interests? And if so to what extent?

Mr Speaker, the Bill also regularized under the Ministry of National Unity, Reconciliation and Peace, an amount of $3 million which was paid to the former combatants of Guadalcanal through the Post Conflict Rehabilitation and Restoration Association of Guadalcanal.

I agree with the need for rehabilitation of ex-combatants and understand that this will be the final of such one-off payments.

Sir, it is imperative that the Government’s proposed reparation framework and bill must be linked to the recommendations of the TRC report be tabled in Parliament as soon as possible.

This will enable us to appropriately deal with the other claims especially those of the victims of the ethnic crisis and those who suffer from the spillover effects of the Bougainville crisis.

I hope the framework should also help us to seriously address the root causes of the ethnic tension.

Mr Speaker, I will now turn to briefly comment on a couple of the expenditures listed under the Advance Warrants which have been used to create appropriations for accountable cash grants provided by development partners.

Sir as outlined in the bill and highlighted by the Minister, $11.9 million in terms of Advance Warrants for the Office of the Prime Minister and Cabinet came from the Republic of China on Taiwan (ROC), National Development Funds.

Sir as highlighted in the PAC report, $497,000.00 of this amount was allocated for two dormitories at the San Isidro Centre.

This is a very worthwhile cause and I wish to thank the Government and the Prime Minister for approving the funds for the Centre.

The other $11.5 million as also mentioned in the PAC report was paid to 40 constituencies through their respective Members of Parliament.

I understand these payments are for projects ranging from logistics to micro projects, education, water supply and sanitation.

Sir, I hope these payments have been used for the proposed projects.

The other 10 constituencies sadly did not qualify for the funding, either they did not apply or failed to meet the required criteria, condition or benchmark.

But seriously, Mr Speaker, I share the Public Accounts Committee’s concern that financial resources that come in the name of National Development Funds should be used for national projects instead of dishing it out to selected Members of Parliament as it was in the last two years.

I therefore concur with the recommendations of the Public Accounts Committee that bilateral funds allocated for national projects such as the National Development funds be brought to Parliament for the usual appropriation.

In this regard, I call on the Prime Minister to include or appropriate in this year’s mid-year supplementary appropriation bill or the 2018 appropriation bill, the ROC 2016 bilateral National Development Funds.

Climate change adaptation including relocation, as well as, building sports facilities for the 2023 Pacific Games must be priority projects for our National Development Funds in the next few years.     

Mr Speaker, we need to strengthen the capacity including skills and expertise of our Government agencies to design project proposals and negotiate for funding especially from global and regional environment and climate change funds. 

We have heard of millions being pledged for climate change adaptation and mitigation initiatives especially for least developed and small island countries like us, but have received very little to date.

In this connection, I welcome the initiative taken by the Government to set up a unit within the Ministry of Finance and Treasury to work on how best Solomon Islands can access and utilize regional and global funds.    

Finally, Sir, we must continue to ensure value for money expenditure and minimize wastage in our system.

We must strategically invest and spend on projects with the highest returns in terms of jobs and income for our people.

Sir let’s not forget that our country’s economic base is narrow, with limited revenue sources, and is extremely vulnerable to external shocks.

This means we must really prioritize what we want to do and can achieve in any given time.

We must also save for a rainy day, hence the importance of building up our cash reserves.

Leader of Opposition
(Statement delivered in parliament on the 2016 Appropriation Bill 2017)





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