Monday, November 11, 2013

Salaries Will Not Be Paid By Loans

There seems to be some confusion about where the money will be coming from to pay for the Budget, most especially  the money to pay the hefty civil servant wage and salary increases and other ongoing expenses such as free education.

Budget expenditure is divided into operating expenditure and capital expenditure. The pay increases and other ongoing expenses are part of operating expenditure that will be covered by government revenue from tax, dividends and sale of some state-owned assets and other revenue sources.
Some of the pay increases will be returned to government as taxation on the higher civil servants' incomes and VAT from their likely increased spending. 

Money will only be borrowed for capital works.

Some political parties have either not understood this or have deliberately made statements to mislead the public, labelling much of the budget as "election promises."  Finance Ministry Permanent Secretary Filimone Waqabaca, however, has said that while "normal expectation from parties is that before elections, government will tend to incur higher deficit. They will now see that this budget did not go in that direction." 

“These are part of our operation costs, and like all other operational expenses that government makes to keep its machines going, the wage increase and the free education policies are covered in our operating . The free education ($64.5m) and wage increase (more than $92 million) policies for 2014 amount to more than $146.5million. 

In comparison, government has estimated to earn $2,175.2 million next year which is an increase from the revised revenue projected for 2013 of $1,976.9million. In 2012, actual operation revenue earned by government amounted to $1,859.4 million. 

Waqabaca says they have done well compared to earlier projections. “Up to the end of September, in terms of out fiscal performance we see that we have a surplus of 0.8 per cent of GDP as opposed to our forecast by September which would have been around three per cent deficit. “Instead we have achieved 0.2 per cent surplus. Basically, this is due to good collection that we have in revenue, VAT and other components while we control our expenditure. He said they were maintaining fiscal management and will work towards macroeconomic medium targets such as lower debt levels and a balanced budget.

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Anonymous said...

The illegal regime is certainly setting new standards for spin and rhetoric . Any Auditor General reports yet???

Humble Civil Servant said...

There is nothing wrong with our government preparing the electorate for 2014: All political parties would love to be in power and make big hand outs in exchange for votes. This is the name of the game anywhere in the world. The fact that Khaiyum and Bainimarama do exactly this is clear proof that we are not ruled by a dictator. We are ruled by a democrat who has yet to be elected. And sure enough, we will be voting for him.

Anonymous said...

Sure with the snout in the trough you are a happy civil servant. But what about those who do not have a government job? What about all those who got the boot because they refused to suck up to Khaiyum?

Anonymous said...

Idiot Croz, safe in knowledge that the NZ taxpayer is keeping him in the custom he would wish, discovers perpetual motion

Crosbie Walsh said...

The meaning of these comments is not clear. Please check what you have written before posting it, and ask yourself will others understand.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

Had a hissy fit did you croz? A bit like Sharon? Or are you just censoring like the junta rag the
Fiji Sun?

Anonymous said...

Are you marc edge?
you sure sound like him!

Anonymous said...

Are you Ghandi the goose? You sure sound like him?