The Government is facing a budget crisis barely a month after it rushed through an historic $3.2 billion election budget only last December.
As a result, Prime Minister Gordon Darcy Lilo’s Government has been forced to slash this year’s constituency funding by a massive 60 per cent.
This means that instead of getting $6 million each per annum, all 50 constituencies will now get only $2.8 million each this year – a reduction of $160 million on last year’s funding level.
Insiders said officials are frantically working to find ways to cushion off the impact on services as a result of a budget cut of this magnitude.
Constituency Development Officers (CDOs) who were attending a week-long workshop which concluded in various provinces last weekend were the first to be informed of the budget crisis.
“We were told that there’s been a 60 per cent cut across the board in constituency funding this year. And we are to work within an annual budget of just $2.8 million, instead of the $6 million per constituency that was in the budget outlay this year,” one CDO said on the weekend.
The $2.8 million is made up of $1.8 million from the SIG and the balance from Taiwan’s annual budgetary assistance.
But the contribution from Taipei is being held up because some MPs have not retired the first tranche they had already received.
The CDOs said such a cut is going to spell disaster.
“We simply don’t know how to relay this news to the people in the constituencies. This is because in the end they will get nothing by way of funding for their new projects. And that’s the bottom line,” the CDO who wants to remain nameless said.
He said the situation was made worse by the fact that many MPs have taken out large credits from suppliers on the basis that constituency funding this year would be used to clear their debts.
“What happens now is that the little money coming through this year would be used to pay off debts and nothing would be left to assist the people in the constituencies,” the CDO said.
One prominent politician for example owes a shipping company as much as $300, 000 in unpaid freight charges. Another, a senior Government minister owes a charterer more than $100, 000 in unpaid freight costs which have been outstanding for more than two years.
“Those are just shipping companies. Imagine how many hardware stores are owed money by politicians,” the CDO said.
It is not clear how the crisis had come about so early in the 2014 financial year.
One theory is that donors have a hand in it.
Proponents of this theory say donors want to force a clean-up of corruption in the government. If this theory proves correct, it means that donors simply shied away from putting money into the 2014 Development Budget as doing so would only fuel corruption in high places, particularly in an election year.
Solomon Islands is expected to go to the poll in October this year.
By Alfred Sasako