Archive for May 7th, 2011

Mac faces $4.6m shortfall

| 07/05/2011 | 71 Comments

(CNS): The government may not finish this financial year in the black, despite recent claims by the premier that public finances were back on track and there would be a surplus. On a number of occasions over the last few weeks McKeeva Bush, who is the finance minister, has pointed to government’s success in stabilizing the country’s cash as one of the main achievements of his administration so far. However, the surplus that he was hoping for has not yet materialised as the governments books are now expected to show a $4.6 million shortfall. As a result, the premier has ordered a further tightening of public belts to turn the figure into a $15 million surplus before 30 June.

Government bosses will now have to find savings of more than $20 million in just eight weeks to enable the premier to predict a surplus for this financial year when he brings the budget later this month for the new fiscal year 2011/12.

In a memo (posted below) circulated on Thursday to chief officers and chief financial officers and copied to the governor the premier said that forecasts made last month were pointing to a deficit of around $4.6 million for core government spending, which he said was “unacceptable” and that the “elected government requires a surplus of $15 million” for this fiscal year end.

Bush said that he wanted $5 million to pay into the government’s general reserve fund, another $5 million to pay into the public service pension past service liabilities and then the last $5 million could be carried over to assist with the forthcoming budget.

The memo instructed civil service management not to hire any more personnel between now and 30 June and to stop spending money unnecessarily, even if it appeared that they had the budget capacity. He told the chief officers to “practice expenditure restraint”.

Bush did not spell out how the civil service would make the $20 million spending cuts in the next eight weeks but said that his ministry would shortly issue reduced budget limits for all ministries and portfolios.

Despite the premier’s wish to finish this financial year with some cash left over, the budget prediction for the 2010/11 financial year made in June last year was for a deficit of over $30 million. However, at the beginning of this year the premier began to state that government hadmanaged to keep spending in check and as a result was on track for a surplus.

Over the last four months the premier has persistently stated that he believed that as a result of the work of his government the public finances had stabilized and said only last month that there would be a surplus of around $13-14 million. 

Continue Reading