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Smarter spending and a more prudent expenditure control have been labeled as underlying government’s ability to rein in on its finances.
It announced today a third quarter result that sees it recording a fiscal surplus of $30.7 million or 0.5 percent of Gross Domestic Product, a complete turnaround from a forecasted net deficit of $117.5 million it was expecting for the quarter.
“Cumulative to 30 September 2009, Government collected $1,008.8 million in revenue and spent a total of $978.1 million, which is well below the spending level forecast for the period. I am pleased with this fiscal performance because it confirms that our efforts to curb wasteful spending of the past are producing results,” said Prime Minister and Minister for Finance Commodore Voreqe Bainimarama.
The revenue collected was 3.9 percent below forecast. This was attributed to slow economic activity in light of the global financial crisis which has in turn affected business and employment, from which government collects its revenues in the form of direct and indirect taxes.
While government’s total spending of $978.1 million was $64.9 million more than what it spent during the same period last year, it still was below forecast by $249.3 million.
This, it said, helped offset the impact of lower revenue but it hopes economic recovery would come in time for better yield in tax collection.
Bainimarama said government’s spending trend now allows it the opportunity to redirect unutilized resources to implement policies that were agreed in the course of the year but were not allocated funds in the Budget.
“Given the low spending levels in certain programs, Government intends to redeploy unutilized resources from these programs to initiatives that support import substitution, assist the poor and improve infrastructure, in particular, national and council roads, water and sewerage services and bridges. These are areas where funds can be productively expended quickly and add to stimulating economic activity,” he said.
Given this scenario, Bainimarama is optimistic of achieving the 2009 Budget deficit target of 3 percent of GDP.
