The National, Wednesday October 7th, 2015
By Gedion Timothy Lapan
WHEN there are tight budgetary conditions, it is important to squeeze low priority expenditure and ensure that revenue dues are duly collected, an economist says.
Institute of National Affairs executive director Paul Barker said that yesterday after the Government announced a K1.4 billion cut to the 2015 budget and its intention to increase revenue by K1.1 billion.
Treasurer Minister Patrick Pruaitch said it was to offset a sharp fall in tax revenue.
Barker told The National that it would have helped a lot if adjustments were made earlier this year or even last December when it was apparent that commodity prices were low.
Barker said an earlier adjustment would have enabled greater flexibility to reduce lower priority spending and safeguard the higher priority needs such as health and education, justice, basic infrastructure maintenance, welfare and emergencies, including preparation for the El Nino drought.
“Leaving it until the fourth quarter of the year (although some internal action was certainly taken by the Government before and after the MYEFO (Mid-Year Economic Fiscal Outlook)) diminishes the options and prospects for effective action. One fears that the cuts will – as on various previous occasions – to be essential maintenance, and operating funds, leaving public sector workers sitting doing little or nothing, with no operating funds, including for important purposes such as oversight and auditing, designed to ensure that funds are not just spent, but spent properly,” Barker said.
He said leaving it to the last quarter undermined the capacity to implement, especially if cuts had been made to operating funds for Internal Revenue Commission and Customs to be able to go out and collect the revenue.
Barker said it was critical that a major focus was given to professional planning and implementation and accountability of public funds to ensure they (public funds) were actually spent on public goods and services, and not side-channelled away into private gains.
He said it was crucial for a proper supplementary budget process occurred so that adjustments made by the Government were transparent.