THE Minister of Finance and Treasury, Manasseh Sogavare has reassured that the government’s finances remain stable due to reservation measures and adjustments in the recently passed Supplementary Bill.
Responding to questions from Opposition Leader Mathew Wale in Parliament Tuesday, Minister Sogavare acknowledged a budget deficit of $41 million—an improvement from the initially projected deficit of $546 million.
He further reported a surplus of $59 million from January to July 2024.
“This reflects prudent fiscal management, with the government effectively managing operational savings of $59 million, part of which has been used to fund $200 million in development budget expenditures by the end of July,” Minister Sogavare said.
“The remaining $141 million in the Development Budget will be sourced from reserved balances, external budget support, and treasury bills received this year,” he added.
Minister Sogavare expressed confidence that the government would be able to manage its core mandates through to the end of the year.
He also assured that government’s revenue collection had continued to improve, with $1.86 billion collected since July 2024.
When asked by MP Wale about the rationale behind the recent 16 percent budget cut in the 2024 recurrent budget, Minister Sogavare explained that the Ministry of Finance and Treasury had closely monitored fiscal performance in the first quarter of the year.
Projections revealed a gap between mainstream revenues—such as those from the Inland Revenue Division, Customs, and non-tax revenue collections—and current expenditure increases.
The gap, he said, could widen to $350 million if current spending patterns continued.
To prevent a further strain on essential services and core government functions, Minister Sogavare emphasized the need for immediate corrective actions on both revenue and expenditure sides.
He said $250 million had been reserved after careful consideration of the implications.
The Ministry of Finance and Treasury, he added, has been working closely with line ministries to lift these reservations where necessary and ensure that critical payments proceed smoothly.
Leader of the Independent Group, Peter Kenilorea Jr enquired about the major sources of non-tax revenue.
In response, Minister Sogavare said the Ministry of Fisheries and Marine Resources (MFMR) and the Ministry of Lands, Housing, and Survey (MLHS) are the two largest contributors with the former alone generating $300 million but the expected revenues from these two ministries have not materialized recently.
Minister Sogavare also highlighted the need for better recordkeeping within the MLHS to facilitate revenue collection and he suggested moving the Land Registry Office from the Ministry of Justice and Legal Affairs (MJLA) to MLHS to improve accessibility to information.
By EDDIE OSIFELO
Solomon Star, Honiara
