14 February 2013

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: 

  • $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
  • $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.

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