13 April 2021

Budget revision should be just, equitable and sustainable.

Liga ba artigu ne'e iha Tetum

Parliament is currently discussing a proposed revision to the already-enacted General State Budget for 2021 to address the simultaneous calamities of the Covid-19 pandemic and the widespread flooding in Timor-Leste last week. More information, including the proposed law, is available here

On 12 April, La’o Hamutuk sent every Member of Parliament a submission (Tetum original), of which the following is an abridged translation:

We appreciate the Timor-Leste Government’s efforts to prevent and eradicate the Covid-19 virus, and its rapid response to the recent natural disaster. These floods show how weak our infrastructure is, and raise important questions about how to support our people and reduce impacts from such disasters in the future.

To respond to this situation, Government and Parliament should re-evaluate the proposed revision to the 2021 State Budget. We suggest the following ways the rectified budget can implement principles of justice, equality and sustainability.

La’o Hamutuk supports the proposal to provide an extraordinary subsidy to the population. However, we believe it would be better not to use Social Security System data as the basis for distributing this subsidy, because:

  1. The Social Security System does not include many vulnerable people, and the current situation makes it very difficult for them to register.

  2. It would be unjust to increase inequality by giving greater support to people who already have more money than to people who do not yet participate in the formal economy.

Timor-Leste has a large gap between those who receive salaries and most “little” people who support themselves in the informal sector or are unemployed. This subsidy is intended to ensure that everyone can sustain their lives during these difficult times. We don’t think the state should distribute different amounts to different people before we can assess the impacts of flooding and the state of emergency on each household. People who used to receive large salaries don’t deserve more support than those with lower incomes – their basic needs and human rights are the same.

To achieve social justice, we recommend using concepts from last year’s Household Subsidy, adapted to ensure that everyone receives the same benefits:

  1. Calculate the amount of the subsidy based on the number of people in each household, without regard to their salaries or Social Security registration.

  2. Considering that it is difficult to travel to other municipalities, the system should also include people who live in rented housing away from their families.

We appreciate that the proposed revision sent to Parliament last month would finance the new emergency measures by reallocating funds from other budget lines, including airports, the Tasi Mane Project and international travel.

Now that the situation has become more challenging, we suggest re-assessing the budget to see what else can be delayed or cancelled. If these is not enough to meet increased spending needs, an extraordinary withdrawal from the Petroleum Fund could be done as a last resort.

We all know that Timor-Leste may not be able to pay for basic services by 2030, when the Petroleum Fund could be empty. Therefore, we need to use the Fund’s limited resources wisely and carefully for essential needs.

We also suggest better coordination between line ministries and development partners to minimize duplication of emergency spending.

We hope that Timor-Leste’s Government and Parliament will take strong measures and make wise decisions to guarantee that all our people, including the “little” ones, can continue their lives without worrying about falling deeper into peril from the pandemic and the flooding.

Thank you for your attention.

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