Government asks Parliament not to reduce the MVR16.9 billion budget

The government has said that it would be impractical to lower the proposed budget figure and has asked the parliament budget committee to approve the MVR16.9 billion budget.

An emergency cabinet meeting was held today following the parliament budget committee’s decision yesterday to cut the budget down to MVR14.5 billion.

Finance Minister Abdulla Jihad told Sun Online tonight that it was discussed during the cabinet meeting that the health sector and the education sector might suffer greatly if the budget was reduced, and that it was decided to advise the parliament budget committee not to reduce the budget any further. Jihad said that the decision has now been communicated with the parliament budget committee.

“Education and health sectors have been neglected the past two years. We have allocated large sums for these two sectors. If the Majlis cuts the budget to MVR14.5 billion as they say they would, we will not have money to spend on these two sectors. If they reduce the budget while these two sectors are suffering, we will not see any development,” said Jihad.

The budget committee decision comes following the central bank, Maldives Monetary Authority (MMA) Governor Fazeel Najeeb’s advice to reduce the budget. Fazeel had said yesterday that it could be very difficult to finance the MVR16.9 billion budget if the forecasted income is not received. Fazeel also raised concerns regarding the large amounts of money budgeted to be obtained from the private sector to reduce the budget deficit.

Finance Minister Jihad said today that reducing the budget is not the key to solving the economic problem and that new ways should be sought to finance the budget and bring new structural development. He also said that the ordinary citizen will suffer financially if the budget is reduced.

“I would like to call upon the members to approve the budgeted initiatives to increase revenue, to step away from the political divide, and not reduce the budget for the sake of the development of the country. Reducing the budget is not a solution. We have work for development and increase the earnings of ordinary citizens in order to solve these problems. I would like to ask all the members to think along these lines. I hope that the budget committee thinks about the government’s proposition,” said Jihad.

Members do not support the government’s proposition to introduce new taxes and increase existing taxes. The budget committee has decided to remove the bed tax and increase T-GST to 12 percent. The government had proposed to keep the bed tax and increase the T-GST to 15 percent. Members also did not support the government proposition to impose T-GST on communication services.

Along with the cooperation of PPM and MDP members, the budget committee had yesterday agreed to reduce the budget and have been working on this agenda today. The committee had accepted the different areas proposed by different political parties to reduce budget and had decided assemble a sub-committee to further analyze these propositions.

The budget committee’s decisions will become final when their report gets submitted to the parliament floor and is approved by majority vote. The committee has decided to submit the report to the parliament speaker this Saturday.