GOVERNMENT finances appear to have hit rock bottom as it struggles to fill a staggering $1.8 billion deficit in this year’s budget.
And government efforts to raise money for good causes are being hampered by what is described as “negative attitude” by members of the public.
“Members of the public always assume that any donations by business houses or corporate entities is a down payment for government favours. Some of us have now shied away from donating to good causes,” one industry leader told Solomon Star.
“Why should we give when all we receive in return is abuse and false accusations,” one executive told Solomon Star this week.
“One of the compelling reasons for our giving is that we want to feel a sense of belonging, which means we have a responsibility for the common good. For our efforts to be spoken of as contributing to corruption in this country is not worth our while,” the man said.
“We have decided to put any fundraising drives on hold until the people have changed their attitude.”
This appears to have contributed to the financial dilemma being faced by the government as it struggles on two fronts.
First, government revenue has shrunk and two the pressure to meet the cost of hosting the 2023 Pacific Games grows by the day as the countdown to the Games opening on 19th November draws closer.
The government has now been forced to turn to State-owned Enterprises (SOEs) to make up for funding shortfall for the Games. Last week the Solomon Post, one of the smallest SOEs, invested $2 million in the Games.
Solomon Power, Solomon Ports and others are next. Some could donate as much as $20 million to the Games’ cause.
On the Government’s budgetary front, revenue collection is all but rosy.
Observers told Solomon Star revenue collection target for this year is only $3 billion – enough to finance the Recurrent Budget and the Development Budget of $1.7 billion.
Because the government has no money, the budget will be exposed to deficit, they said. This year’s deficit of $1.8 billion is the largest in history since Solomon Islands gained political independence in 1978.
The government may now be forced to borrow offshore to finance the deficit.
Unless donors come to the table and the option to borrow is taken up, Solomon Islands is in for a rough ride in the months ahead, observers said.
By Alfred Sasako