THE cat is out of the bag – the Government’s much-talked-about Economic Stimulus Package (ESP) has run out of money, an investigation by Solomon Star has established.
At the same time, our investigation has also found that the Ministry of Finance and Treasury gave misleading information in its economic growth forecast in a booklet the Government prepared and endorsed to address the impacts of the COVID-19 pandemic.
According to the booklet, Solomon Islands Government Economic Stimulus Package To Address the Impacts of the COVID-19 Pandemic, the Government’s approved total budget for the facility in 2020 was $606 million.
But instead of telling the nation its total budget for the ESP was $606 million, it withheld the information. It simply announced the cost of its ESP was just $309 million.
According to those in the know, the government was hoping donor support would shoulder the shortfall of $297 million (the difference between $606 million budget outlay and $309 million in announced ESP). It is understood donors may have largely withdrawn their support because the focus of the initial ESP was directed at the wrong end of the government’s fiscal monetary policy.
The booklet said the government knew as early as March last year it did not have $120.5 million to cover the initial shortfall in its forecast.
Four key sections of the $309 million Package were outlined as:
- Soft Measures – $ 25 million
- Immediate Recovery 1 – $124 million
- Immediate Recovery 2 – $ 70 million
- Medium to Long Term – $ 90 million
TOTAL = $309 million
The booklet also claimed the government had secured SBD606 million for the stimulus package.
- COVID-19 Domestic Development Bond – SBD120 million
- Bond/Treasury Bill – DBSI – 20 million
- SIG Budget – 20 million
- ADB Budget Support (USD26 million) – 213 million
- World Bank Budget Support (USD20 million) – 164 million
- DFAT – 69 million
TOTAL SECURED SBD = SBD 606 MILLION
“The government has given us half-truths in its costing of the stimulus package. Unless the situation is reversed now, the ruling government is headed for the rocks. It has no money left in the kit,” those in the know warned.
“Worse still, there is no money coming in for the government because it invested the stimulus package funds in the non-productive sector.”
“The fear now is that the SINPF and other SOEs would be prime targets for the government to borrow money to finance its ill-conceived stimulus package,” some said.
The revelation that the ESP has hit rock bottom in terms of funds, has prompted calls for the sacking of the Stimulus Package Oversight and Implementing Committee.
“The committee has let the nation down. It has abused public funds in the way it disbursed ESP funding,” one angry applicant said Friday.
“The whole thing was a scam at the expense of the taxpayers. The only people who benefited are the politicians.”
By Alfred Sasako