Govt to Reduce Operational Expenditure

The interim administration has revealed that the government is spending 81 percent of its budget on operational expenditure at this stage, and decisive steps need to be taken to correct the anomaly.

Interim PM Commodore Frank Bainimarama said a meagre 19 percent of the government budget is spent on capital projects such as building of roads, health and education facilities, improvement of water supply, squatter resettlement and projects for communities.

He said based on the 2007 budget estimates, this equates to $1.3 billion for operational expenditure and only $0.3 billion for capital projects, out of the total budget of $1.6 billion.

Commodore Bainimarama said the interim government is determined to forge ahead with the measures it is implementing to contain the operating expenses for the public service, stabilize government finances and set the country on the path to sustained economic recovery.

He said some of the measures to reduce the operating expenditure include the 5 percent pay cut for civil servants, reduction in retirement age to 55 years and the deferment of the Partnership Agreement.