Parliament approves MVR26.7bn budget for 2017

Parliament approves MVR26.7bn budget for 2017
November 25 19:29 2016

The parliament passed with a 60-vote majority on Thursday the MVR26.7 billion (US$1.7 billion) budget proposed for 2017, approving the government’s spending plans and revenue raising measures without any revisions.

Along with 45 MPs of the ruling Progressive Party of Maldives and six from its coalition partner Maldives Development Alliance, five Jumhooree Party MPs, Adhaalath Party MP Anara Naeem, and Deputy Speaker ‘Reeko’ Moosa Manik also voted to pass the budget.

Ahead of the vote, opposition MPs submitted several amendments to increase funding for schools, the family protection authority, and the centre for disabled people.

But the pro-government majority voted against all 18 amendments.

The bulk of the amendments was proposed by MP Mohamed Aslam of the main opposition Maldivian Democratic Party, who recommended introducing a monthly MVR2,000 unemployment benefit, setting a minimum wage, and increasing the disability benefit to MVR5,000.

Some 15 MDP MPs voted No to the budget, but MPs Ibrahim Shareef and Ibrahim Mohamed Didi defied the party’s whip line to vote in favour. Both have previously indicated that they would vote Yes if development projects are included for their constituencies in the southern Addu City.

Didi told newspaper Mihaaru  that the government has been neglecting constituencies represented by opposition lawmakers who voted against the budget for the past two years. Ministers brought up his refusal to vote for the budget when he questioned the failure to implement projects, the retired brigadier general said.

“They cannot show my not voting for the budget as an excuse this time for not doing anything for Hithadhoo’s development through the budget,” he was quoted as saying.

During Wednesday’s final debate on the budget, PPM MP Mohamed Waheed Ibrahim – who is part of a breakaway faction of the ruling party – also said he would vote in favour because he did not want to give the government an excuse to neglect his constituency.

Several opposition lawmakers accused the government of favouring constituencies represented by ruling party MPs in the MVR7.9 billion Public Sector Investment Programme, which they said did not include funds for harbours, sewage, clean water, and electricity in their constituencies.

JP MP Hussain Mohamed said sanitation projects for two islands in his constituency have been omitted from next year’s budget. The projects were included in the 2016 budget and design work was also completed, he said.

Other MPs also complained that projects pledged for their constituencies have “disappeared” from next year’s budget.

But PPM MPs said the current administration has carried out an unprecedented number of infrastructure projects across the country during the past three years. Some 547 projects by the housing ministry are presently underway, they said.

Pro-government MPs also stressed an 11 percent decrease in recurrent expenditure and praised the government’s policies for reducing the longstanding gap between spending and income.

Opposition MPs meanwhile characterised the proposed new taxes and fees as attempts to “suck the public’s blood” and “reach down people’s throats.”

During the preliminary budget debate earlier this month, Minority Leader Ibrahim Mohamed Solih said the 2017 budget shows that the economy is slowing down and that the government is unable to find avenues to finance new development projects.

“What this budget shows is the Maldivian treasury is going into the fist of a foreign party,” he said.

Solih said the only project for his constituency was an MVR900,000 sports arena. “This was included in the four budgets submitted by President [Abdulla] Yameen. I hope the work will be completed in 2017,” he said.

He noted that MVR3.6 million was earmarked in the 2016 budget to upgrade the Hinnavaru health centre, but the project has been omitted from next year’s budget after a ceremony was held to lay the foundation stone.

The minority leader also questioned the revenue forecast of MVR21.9 billion, which includes MVR2 billion from new revenue raising measures.

While the government hoped to collect MVR22 billion in 2016, Solih noted that income is only expected to reach MVR18 billion by the end of the year, which he predicted would be the ceiling in 2017 as well.

As MVR16.8 billion would be spent on recurrent expenditure and debt repayment, Solih said the government would not be able to commence new development projects.

“As a result, the government will have to take loans from the domestic market,” he said.

The pension fund is depleted and banks are unable to lend to local businesses because of investments in treasury bills and bonds to help the government manage its cash flow, he added.

He warned that public debt would reach MVR47 billion by the end of Yameen’s five-year term, doubling from 2013.

Majority Leader Ahmed Nihan, however, dismissed the opposition’s criticism as political rhetoric.

The 2017 budget would pave the way for unprecedented infrastructure development, improve standard of living, spur economic growth, create new jobs, and rein in the fiscal deficit, he said.

While previous governments managed to establish water and sewerage systems in only 10 islands, Nihan said the current administration has completed projects in 10 islands during the past three years, expressing confidence of providing clean water and sanitation services in 75 percent of inhabited islands by the end of 2018.

“This budget’s aim is to work towards achieving for the first time in the Maldives a balance sheet that is clear of debt and of a standard that you can put in front of any bank and get a loan,” he said.

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