Ad hoc committee proposes budget revisions

The closed ad-hoc Parliamentary Committee on the 2013 State Budget presented its proposals to Parliament on 14 February, as summarized in the table at left. Their total budget is $150 million smaller than the Government's December proposal, as shown in these revisions in the budget law (also Portuguese).  The most significant changes are:

1. Reduce the Contingency Fund by $8 million, although this potential saving is reallocated to other expenditure lines.

2. Reduce generator fuel expenditures by $17 million, reallocating $15 million of this to road maintenance.

3. Reduce appropriations to the Infrastructure Fund by $150 million (see table at right). The largest cuts are:

• Electricity (cutting $50 million from $174 million originally proposed by Government)
• MDG housing and sanitation (cutting $42 million from $88 million proposed)
• Roads (cutting $29 million from $116 million proposed)
• Public buildings (cutting $8 million from $29 million proposed).

4. Apply $261 million of the cash balance in the treasury (which stood at $819 million at the end of 2012, largely because of excessive transfers from the Petroleum Fund, as shown in the graph at left) instead of raising new revenue or additional transfers from the Petroleum Fund.

5. Reduce planned withdrawals from the Petroleum Fund during 2013 from $1,197.8 million to $787 million, the amount estimated as the sustainable income (ESI).

The budget revision also includes $43 million in additions and reductions to spending from the Consolidated Fund. Items greater than $0.5 million not listed above are as follows: 

Additions

• $3.0m for PDID (small local infrastructure projects)
• $2.0m for PNTL Medals and district petty cash
• $2.0m for CNE subsidies for political parties
• $1.5m for the Los Palos - Lore Road (via the Infrastructure Fund)
• $1.3m for Atsabe and Maliana churches
• $1.0m for Special Economic Zones (ZEE)
• $1.0m for Parliamentary cars
• $1.0m for cooperatives
• $1.0m for Dili District Prosecutor
• $0.9m for rehabilitating Suai Prison
• $0.8m for the new Timor-Leste Cooperation Agency (foreign aid)
• $0.7m to build Dili District Court
• $0.6m for Metinaro ossuary
• $0.5m for CPLP Economic Forum
• $0.5m to pay Singapore hospital bills

Reductions

• $21m in Infrastructure Fund cuts in other sectors (see table above)
• $9.4m of $18.8m reappropriated for unfinished PDD-1 projects
• $3.3m of $18m allocated for the Civil Society Fund under the P.M.
• $2.0m of $10m allocated for "Impact of Special Regimes" in the contingency fund
• $0.5m from Parliamentary travel

The deferral of $150 million in Infrastructure Fund projects will have a significant impact on the State Budget for 2014 and beyond, but Parliamentarians have not received information on how much, or on how much will have to be transferred from the Petroleum Fund from 2014 on.  The Tasi Mane project, which was untouched to show unity to Australia and the oil companies, will also have a huge impact on future budgets.

Update 19 February: Thanks to the efficiency of closed-door processes, the Parliamentary plenary approved the budget on 18 February, two days early, by unanimous vote.  The only amendments were those agreed by the ad hoc committee.

Konvite ba media briefing kona ba Tratadu CMATS

Ita boot bele hetan aprezentasaun husi briefing ida ne'e hanesan PowerPoint ka PDF. 
You can download an English translation of the presentation from this briefing as PowerPoint or PDF.

Loron 23 Fevreiru 2013 sei sai data inísiu ba Timor-Leste ka Australia atu halo notifikasaun hodi termina Tratadu CMATS (Certain Maritime Arrangements in the Timor Sea/Aranjamentu Maritima balu iha Tasi Timor) hafoin tratadu ne’e vigora dezde 2007.  Ita boot bele hetan informasaun baziku iha ne’e iha Tetum no English, ka iha ne'e ho detallu liu.

Durante ne’e iha kobertura barak hosi media kona-ba asuntu CMATS ne’e, no La’o Hamutuk hakarak atu apoiu jornalista sira hodi hatene liu tan informasaun kona-ba vantajen no dezvantajen karik Timor-Leste termina Tratadu CMATS. Nune’e ami hakarak konvida ita-boot sira husi Media ne’ebé interese atu komprende asuntu ne’e atu bele mai tuir briefing no diskusaun ne’ebé sei realiza iha:
Loron    Kinta-Feira,  21 Fevreiru 2013
Fatin     La’o Hamutuk, Rua dos Martires da Patria, Bebora, Dili, Timor-Leste
Horas   Tuku 14.00 to 16.45

Bele konfirma ita-boot sira nia partisipasaun ba +670 7734-8703 ka juvinal@laohamutuk.org.

La'o Hamutuk sei organiza enkontru ida tan ba públiku kona ba tópiku CMATS no fronteira maritima iha semana ida ka rua. Bainhira ami konfirma data no fatin, ami sei fahe informasaun klaru.

Secret committee weakens transparency

[Liga ba blog ida ne'e iha lingua Tetum]

On February 6, 2013, Timor-Leste’s Parliament gave general approval to the 2013 State Budget. Forty MPs from the Coalition voted in favor, and 25 from Fretilin abstained.

On the first day of detailed discussion, Parliament decided to establish an “Ad Hoc Committee to Collect and Analyze Proposed Consensus Amendments to the Proposed State Budget.” This Committee includes the President and Vice Presidents of Parliament, six MPs from FRETILIN, one representative of each of the three parties in the Coalition and the Presidents of every standing committee.

The ad hoc Committee will compile and discuss proposed amendments, presenting those which receive consensus for approval by the plenary without substantive debate. The Committee will work for three days, and is closed to the public. Journalists and civil society organizations are not allowed to observe, and the only participants are Government ministers, experts and advisors.

La’o Hamutuk thinks that although this Committee gives more space and legislative power to the opposition to contribute than in the previous Parliament, the lack of public access it weakens Timor-Leste’s budget process transparency.

Up to now, La’o Hamutuk has been proud that Timor-Leste, especially Parliament, has become a model of budget transparency for other countries. Our Parliamentary budget debates are very open, with live radio and television coverage, and civil society groups like La’o Hamutuk are allowed to participate in Committee discussions. However, the secret meetings of this ad hoc Committee make us afraid and sad, as this reduces Timor-Leste’s transparency in the eyes of the world.

The just-released 2012 Open Budget Survey measures transparency in the state budget process of many nations, and rated Timor-Leste at 36 out of 100, slightly better than our score of 34 in 2010. Although it’s a little improved, Timor-Leste’s score is still lower than Indonesia, Malaysia and the Philippines. We’re somewhat better than Cambodia, Myanmar and Vietnam, which shows that Timor-Leste gives a bit more information to the public. A non-transparent budget process weakens democracy, because citizen participation in the decision-making process is limited. In addition, less transparency makes it easier for leaders to divert state resources to a special interest group or individual, or to corruption, preventing the public from receiving state benefits and condemning them to poverty.

For more information about the 2013 State Budget, link to La’o Hamutuk’s website.

Komisaun segredu hafraku transparénsia

Link to this blog in English

Kuarta Feira, 6 Fevreiru 2013, Parlamentu Nasionál aprova jeneralidade ba Orsamentu Estadu 2013. Deputadu 40 hosi Bloku Koligasaun vota a favor no Deputadu 25 hosi Fretilin abstain.

Loron primeiru ba diskusaun espesialidade nian, Parlamentu Nasionál deside ona iha plenária atu estabelese Komisaun Eventual ba Rekolla no Analisa Proposta ba Alterasaun Consesuais ba Proposta Orsamentu Jerál Estadu 2013. Komisaun Eventual ida ne’e kompostu hosi Prezidente no Vice Prezidente Parlamentu, deputadu na’in neen hosi Bankada Fretilin, reprezentante ida hosi kada bankada sira seluk, no Prezidente Komisaun espesializadu permanente hotu.

Servisu Komisaun Eventual ida ne’e atu rekolla, diskute no aprezenta alterasaun ne’ebé mai hosi desizaun konsensu entre bankada hodi lori ba aprovasaun iha plenária lahó diskusaun ho conteudo. Durasaun servisu ba Komisaun Eventual ida ne’e durante loron tolu nia laran, no taka ba públiku. Jornalista no organizasaun sosiedade sivíl sira labele akompaña, maibé partisipa de’it hosi membru Governu, peritu no asesor sira hosi Governu.

La’o Hamutuk hanoin katak maske Komisaun Eventual ida ne’e fó espasu no podér lejizlativa ba opozisaun atu kontribui kompara ho lejislatura anterior, maibé bainhira lahó partisipasaun hosi públiku hatudu katak prosesu ida ne’e hafraku tiha Timor-Leste nia transparénsia iha prosesu halo orsamentál.

Durante ne’e, La’o Hamutuk orgullu ba Timor-Leste, liu-liu ba Parlamentu ne’ebe sai promotór no mata dalan ba transparénsia orsamental ba nasaun sira seluk. Ita nia prosesu diskusaun orsamentál iha Parlamentu nakloke tebes ba públiku, ho kobertura direta ba debates plenária hosi Televizaun  no Radio, no mós sosiedade sivíl sira, hanesan La’o Hamutuk hetan lisensa atu partisipa iha diskusaun Komisaun C no Komisaun balu nian. Maibé ho enkontru segredu hosi Komisaun Eventual ida ne’e, ami ta’uk no sei triste liu bainhira ida ne’e sei halo Timor-Leste nia nivel transparénsia sei tun tan ba bei-beik iha mundu.

Foin daudauk ne’e Open Budget Survey iha 2012, survey ida ne’ebé atu sukat nivel transparénsia iha prosesu orsamentu estadu hosi kada nasaun nian, hatudu katak Timor-Leste nia valor (score) iha 36 hosi 100, valor ne’e hadi’ak uitoan kompara iha tinan 2010 ne’ebé Timor-Leste nia valor iha 34 hosi 100. Maske hadi’ak uitoan, valor Timor-Leste nian ne’e nafatin ki’ik kompara ho Indonézia, Malázia no Filipina. Ita di’ak uitoan kompara ho Cambodia, Myanmar no Vietnam, hodi hatudu katak Timor-Leste fornese informasaun uitoan liu ba públiku kona-ba prosesu orsamentu estadu nian. Bainhira prosesu orsamentál ne’e la transparente, ida ne’e sei hafraku demokrasia, tanba limite partisipasaun no envolvimentu sidadaun sira nian iha prosesu foti desizaun. Aleinde ida ne’e, menus transparénsia ne’e dala barak hafasil ukun-na’in sira atu uza rekursu estadu nian ho laloos ba interese grupu, pesoál ka korrupsaun, ne’ebé halo povu sira nafatin labele hetan benefísiu hosi estadu no sempre moris iha kondisaun ne’ebé kiak.

Atu hetan informasaun tan kona ba Orsamentu Jerál Estadu 2013, liga ba La'o Hamutuk nia website.

Budget passed in general; Committee recommendations

Timor-Leste’s Parliament just completed three days of general debate on the 2013 General State Budget, approving it in generality with 40 votes in favor, zero against, and 25 abstentions (all FRETILIN).

Tomorrow they will begin debate, amendments and voting on each component of the budget, with a final vote on 20 February. During the last few weeks, each Parliamentary Committee held extensive hearings on different sectors of the budget, receiving testimony from La’o Hamutuk and many government officials, and others.  Committee C (Public Finances) compiled its analysis and recommendations with those from other Standing Committees and the Group of Women Parliamentarians into a 92-page report (Portuguese), which La’o Hamutuk has translated into English.

La’o Hamutuk’s web page on the budget includes many documents and reports in English, Tetum and Portuguese, including daily press releases issued by Parliament and opening speeches by Prime Minister Xanana Gusmão and FRETILIN leader Mari Alkatiri.

In its report, Committee C made sixteen of its own recommendations, which we have translated as follows:

1. Mindful of the execution of expenditure supported by money from the Consolidated Fund of Timor-Leste in recent years, Committee C concludes that the Government has enough money available in the Treasury accounts (balances accumulated in CFTL for several years plus interest) to meet part of the appropriations allocated from that Fund for 2013 and, in this way, to reduce the impact of public expenditure on the Petroleum Fund. We therefore recommend that during the detailed discussion of the proposed budget law, priority be given to that financing source to reduce the amount of transfers to be made from the Petroleum Fund in 2013.
2. After approval of the 2012 Rectified Budget, the Government withdrew from the Infrastructure Fund, specifically the “Tasi Mane Project,” $50 million to cover primarily recurrent expenditures from the Consolidated Fund of Timor-Leste, promising in front of the National Parliament to reinstate this amount in the General State Budget for 2013, which has not come to pass. We recommend that when PN discusses the details of this law, it should include this transfer to the Infrastructure Fund, while reducing the “Contingency Fund” and “Appropriations for Whole of Government” (Provision for impact of special regimes, retroactive financing and funds for legal services).
3. The Government allocates $29 million in the next budget for the Contingency Fund, an amount which, despite being consistent with the legislation in force (3% of the overall budget), is high. The use of money from the Contingency Fund during 2011 is questionable, and 2012 execution will probably confirm this. We recommend that the Ministry of Finance require strict adherence to fiscal discipline from all Ministries, in order to avoid systematic and indiscriminate resort to the Contingency Fund. Urgent operating needs that are not covered by initial allocations of various ministries can be overcome by using budget amendments during the year.
4. Taking into account the possible effects of public spending on the prices of goods and services in the domestic market, we recommend specific monitoring the evolution of the consumer price index (CPI), which can be addressed by quickly completing the updated consumer goods basket and quarterly collection of statistical information on this market basket, to analyze the evolution of domestic inflation.
5. By considering the relevant suggestions already made by the Committee C in its last two reports, We return to recommend urgent adoption of the Official Plan of Public Accounting, in compliance with article 10 of Law no. 13/2009 of October 21.
6. Timor-Leste’s economic growth has been almost entirely sustained by oil revenues, and the formal economy barely exists. The current situation is worrisome and requires the Government to increase efforts to gradually create the conditions necessary to increase non-oil revenues.
7. The increased concern with attracting foreign private investment, after the end of the UN mission in Timor-Leste which further accentuated the unemployment rate, leads Committee C to recommend that the Government proceed to implement concrete measures to minimize unemployment in Timor-Leste.
8. The macroeconomic projections for 2013 contained in the Budget Book 1 are superficial and inconsistent with reality, lacking for the future a more thorough and well-founded analysis from the Government. The discrepancy between the data presented in various budget books on the level of unemployment, as well as on national agricultural production, illustrate the situation.
9. Committee C recommends that the government be more realistic with regard to the execution of infrastructure projects included in the Special Infrastructure Fund and proceed to their planning and programming in a structured way, ensuring their quality and continually monitoring their evolution.
10. It is recommended that all ministries be sensitive to gender issues and reflect this sensitivity in allocation of funds in their budgets.
11. Despite the overall appropriation of the Private Budget for National Parliament approved for next year, which is correctly included in the Government’s budget proposal, its distribution among the various categories of expenditure presents inaccuracies, so it is recommended that this be corrected during the detailed discussion of PPL No. 2/III(1), pursuant to the Parliamentary resolution which approved its Private Budget for 2013.
12. Encourages the Government to invest more strongly in renewable energy in 2013, especially in solar energy for electricity production, mainly in Dili and in remote areas of the country, in order to reduce energy and environmental bills, which we understand to be unaffordable in the medium term.
13. It is recommended that the Government quickly introduce a plan for cost recovery for the country’s electrical infrastructure, given the massive investment that has been accumulated in the sector and the fact that Hera Power Station is now partially operational.
14. It is recommended that under general plenary debate of the proposed 2013 budget, the Government should provide criteria and information that underlie justification for allocating $92.5 million for veterans’ pensions and a projected growth of 4% per year for future years.
15. The Committee recommends that in the future, the Government mention in Budget Book 1, not only the amount of borrowing contracted by the state, but also the projected interest rates (fixed and variable) and the actual amount of global interest to pay through the end of the loan periods.
16. Finally, we recommend once again that the Government include in their budget proposals, an evaluation of the of economic, social and environmental impact of their economic, financial and fiscal policies on the population.