Handing out the Cash

Liga ba artigu ida ne'e iha Tetum

One of the outcomes of the Parliament’s closed-door budget discussions is $64 million in increased “Public Transfers” in the 2014 state budget, which will reduce transparency, accountability and good governance. La’o Hamutuk is saddened by this development and by the readiness of Parliamentarians to hand out Timor-Leste’s limited petroleum wealth without careful thought.

In recent years, Timor-Leste has spent about 20% of its state budget on “Public Transfers” – payments of money to individuals or institutions which are not controlled by contracts, tenders or other procurement processes and which often leave no paper trail. The largest part of this is for veteran’s benefits, but during 2013 Timor-Leste transferred $197 million to a wide variety of beneficiaries. For 2014, the Government proposed $292 million in transfers, and Parliament is increasing this to $336 million by adding $64 million in new and increased transfers, an amount about the same as the entire Ministry of Health budget.

La’o Hamutuk has tried to figure out what the biggest ones are, although documents and amendments leave out much information and we may have misunderstood who some of the recipients will be.

The net addition in transfers is $44 million, as Parliament removed $20 million or shifted it to other budget categories. The largest of the 11 reductions are:

• $10.5m (96%) from the National Directorate for Land and Property in the Ministry of Justice, which was changed to a Goods and Services expenditure and not cut from the overall budget
• $5m (96% cut) from the Contribution Fund for Social Institutions under Whole of Government
• $2.2m (67% cut) from Contributory Social Security in the Ministry of Social Solidarity.

Parliament added or increased transfers on seventeen budget lines, totaling $64 million. The largest are:

• $20m (new) to capitalize the Central Bank of Timor-Leste under Whole of Government
• $20m (4000% increase) for the Oecusse Special Economic Zone, under the Ministry for the Presidency of the Council of Ministers
• $5m (242% increase) for the Timor-Leste Cooperation Agency in the Foreign Ministry (to demobilize armed forces in Guinea-Bissau?)
• $5m (200% increase) for the g7+ under Whole of Government
• $5m (67% increase) for Financial Contribution under Whole of Government (to pay IMF dues?)
• $1m (new) for the Directorate of Gender Policy and Development in the State Secretariat for Promotion of Equality
• $1m (28% increase) for the Directorate of Physical Education and Sports in the State Secretariat for Youth and Sports (for the Football Federation of Timor-Leste?)
• $1m (new) for the office of the Minister for Social Solidarity
• $1m (12% increase) for the Ministry of Petroleum and Mineral Resources (audit services for the National Petroleum Authority?)
• $1m (20% increase) for the National Elections Commission (to give to political parties?)
• $1m (20% increase) for pensions for former high office-holders under Whole of Government
• $0.8m (new) for the Secretary of State for Institutional Strengthening.

Unfortunately, these allocations were not included in the detailed budget the Government proposed to Parliament at the end of October, and Parliament’s rushed “consensus” process this week does not provide for sufficient consideration.  Easy come, easy go.