OrsRect2012: Borrowing from ourselves

[Blog ida ne'e iha lian Tetum]

Timor-Leste's newly elected Fifth Constitutional Government has asked Parliament to approve a revision (rectification) of the $1.7 billion dollar 2012 State Budget enacted last December. The new expenditures, mainly pensions for veterans and old people, will use money already appropriated for the Tasi Mane project which will not be spent this year. However, the Government has promised to replace this money in the 2013 budget that it will present to Parliament next month.

On Friday 14 September 2012, the Council of Ministers approved a mid-year budget rectification proposal (full text in Portuguese) and sent it to Parliament for enactment. Parliament began its legislative session the next day, and Economics Committee C went to Baucau on Monday to discuss the proposed budget law.

The proposed revision does not change the total amount of the 2012 State Budget. However, it adds $55.4 million in new spending, to be financed by borrowing $50 million from the $164 million allocated to the Tasi Mane petroleum infrastructure project in the 2012 budget's Infrastructure Fund "on condition of being reinstated in 2013." Timor-Leste's 2013 State Budget will probably continue to be one of the fastest-growing in the world, which La'o Hamutuk believes leads to bankruptcy in about 12 years.

The biggest new expenditures are these, with details in the budget documents on our website:

• $26.9 million more for veterans' pensions, adding to $80.4 million already appropriated, of which $73.8 million had been spent by 18 September;
• $ 7.1 million more for old-age pensions, adding to $35.9 million already appropriated for Social Security, of which $16.7 million had been spent by 18 September;
• $ 6.1 million more for the Contingency Reserve, adding to $21.2 already appropriated, of which apparently only $1.6 million had been spent by 18 September;
• $ 6.4 million more in three items for the military and police, adding to $64.1 million already appropriated, of which $36.9 million had been spent by 18 September;
• $ 9.0 million more in seven other items for education, health, water transport, civil society and other functions.

The proposed rectification also shifts funds between ministries, including those where were terminated and new ones created by dividing previous ministries. La'o Hamutuk's web page on this rectification includes deeper analysis and links to the Government's Budget Book (Tetum), Program and other relevant materials in English, Tetum and Portuguese.