The government faces tight cash flow situation amidst 2023 Pacific Games focus.
The government is facing a tight cash flow situation as it prioritizes preparations for the highly anticipated 2023 Pacific Games. The Finance Permanent Secretary, McKinnie Dentana, shed light on the challenges the government is currently grappling with, citing slower-than-expected revenue receipts during the first and second quarters of the year, coupled with increased expenditures across all ministries.
According to Dentana, recurrent spending accounts for 42 percent of the government’s budget, with development expenditure amounting to 23 percent. This has resulted in a deficit of $262.8 million as of June 2023, excluding the development financing receipt committed during the same period. To address the financial strain, the government is implementing stringent expenditure measures, focusing on allocating resources towards critical priorities while postponing or halting less essential and unproductive expenditures to avoid misuse and wasteful practices.
As part of these measures, the government has restricted or considered unnecessary expenses, including overseas travel (except for ministerial and Permanent Secretaries), in-service training, domestic travel for monitoring assessments, consultations, workshops, and meetings, as well as advance payments. The Finance Ministry is now emphasizing the facilitation of Local Purchase Orders (LPOs), and special imprest payments will be subject to careful evaluation on a case-by-case basis.
Undoubtedly, the top priority for the Finance Ministry is ensuring full funding for the government’s major development policy commitments, with special emphasis on hosting the 2023 Pacific Games and preparing for the 2024 National General election.
Dentana also outlined other essential policy priority areas, such as payroll (weekly), debt servicing, and critical services encompassing health and education grants, supplies for police and corrections, utility services, office and house rent, and public servants’ leave.
Regarding the 2023 Pacific Games and the National General election, Dentana assured the public that the government remains dedicated to providing the necessary resources to ensure the successful execution of these landmark events.
Since May, the Government’s Treasury has already released $136 million to the National Hosting Authority (NHA), constituting 37 percent of the total NHA budget of $367 million. This allocation exemplifies the government’s unwavering commitment to the success of the 2023 Pacific Games, which has become the nation’s foremost priority.
Dentana assured the public that measures are being implemented to ensure financial stability and proper allocation of resources across various sectors, reinforcing the nation’s continuous progress and development.