The underspending of $485 million was a result of the tight control on public spending and the under-utilisation of certain budgetary allocations – Goundar

Government expenditure for the 2020/2021 financial year was below what they had projected.

According to the fourth quarter Appropriation Statement, the government had projected to spend $3.674 billion however the actual spending was $3.189 billion.

The Acting Permanent Secretary for Economy, Shiri Goundar says the underspending of $485 million was a result of the tight control on public spending and the under-utilisation of certain budgetary allocations due to the prevailing circumstances during the financial year.

Goundar says the highest underspending was recorded for interest expenditure due to the lower than expected cost of borrowing in the domestic market and access to concessional debt from external multilateral and bilateral development partners like the Asian Development Bank, World Bank, Asian Infrastructure Investment Bank and JICA.

He further says the public wage bill was also lower than the budget as a result of the tight control on civil service recruitment while the COVID-19 induced restrictions caused some delays in capital projects, tertiary education spending and tourism marketing.

Goundar adds the favourable fiscal performance relative to the Budget was largely due to a $469.4 million over-collection in Government revenue, 28 percent higher than the budget and the significant over-collection in Government revenue was attributed to $210 million non-tax cash inflow from the divestment of Energy Fiji Limited shares which was not initially included as part of revenue in line with their conservative revenue estimation strategy.

He says this was further supported by the over-collection of $254.7 million in budget support grants from development partners mainly Australia, New Zealand and the European Union.

Goundar says on the contrary, tax collections were slightly below forecast due to the disruptions caused to business and economic activity following restrictive measures imposed aimed at managing the second wave of COVID-19.

Goundar also says during the fiscal year, Government also undertook a redeployment of $61.2 million in line with Section 22 of the Financial Management Act 2004.

A redeployment is the movement of funds from one Head of appropriation to another Head of appropriation while a virement allows for movement of funds within an appropriation Head.

Goundar adds provisions for redeployment and virements are flexibilities provided under the law for operational agility and are expenditure neutral with spending maintained within the overall appropriation approved by Parliament.

Meanwhile, National Federation Party Leader Professor Biman Prasad says the virement of just over $61 million from one Head to another in the 2020-2021 Budget proves the government has no money to provide timely and meaningful assistance to the people.

Professor Prasad says government’s final quarter Appropriation Statement shows that the bulk of the virement was for unemployment benefit, for which $100 million was allocated in last year’s budget.

The NFP Leader says the fact that funds from other Heads of sectors were vired to be used for other purposes, for which allocations were made in the budget, and government expenditure was $484 million less than that budgeted for, is evidence that government has no money.

Prasad claims this is a cash-strapped government with the Ministry of Economy scraping the bottom of the barrel to find money adding that when they are unable to find income, funds allocated for other purposes are vired or used.