Record MVR27.5billion budget passed for 2016

The parliament passed today a record MVR27.5billion (US$1.7billion) budget for 2016 without major revisions. Some 59 MPs voted in favor.

The only change brought was a hike of MVR20million (US$1.2million) for the judiciary.

The main opposition Maldivian Democratic Party issued a three-line whip against the budget. Some 11 amendments proposed by the party were voted out.

The deficit stands at MVR3.4billion (US$220million). A third of the budget is allocated for wages, while recurrent expenditure comprises 59 percent of the budget.

An unprecedented MVR9billion (US$584million) has been earmarked for infrastructure development, of which MVR2billion (US$130million) is designated for the development of the Ibrahim Nasir International Airport and a bridge between the capital Malé and the airport island.

Several MPs, including that of the ruling coalition, had complained over the government’s failure to launch development projects slated to begin this year. Many projects have now disappeared from the 2016 budget, they said.

Acknowledging discontent over funds for regional development, majority leader Ahmed Nihan said the government intends to submit a mid-term budget in 2016 if its revenue forecasts are realized.

A majority of the 21.5billion (US$1.4billion) expected revenue is to come from taxes, and another MVR4billion (US$260million) from new revenue raising measures.

The measures proposed by the MDP included subsidies for fishermen and farmers, a pledge to begin all water and sewerage systems promised for 2016, funds for the human rights watchdog to monitor prisons, omit a three percent tax on migrant worker remittances, hike welfare payments to single parents and the disabled, delay the enforcement of land taxes and funds for the watchdog body that monitors domestic violence.

Ruling coalition MPs praised the budget as one that would “bring the public happiness,” and condemned MDP’s welfare measures. The proposals were aimed at widening the deficit, some said.

Ruling Progressive Party of the Maldives MP Saudhulla Hilmy said the budget was planned: “Many of our PPM MPs would also want projects for their constituencies, but we can only do so based on our earnings. If our debt rises every year, that may be an irrevocable loss.”

Jumhooree Party leader Gasim Ibrahim applauded President Abdulla Yameen for the airport and bridge projects. “Because of the priority given to these two projects, development projects for the islands might be stalled for 2016, but even so we must do this.”

MDP MP Ibrahim Mohamed Didi said the government was not able to disburse funds allocated for southern Addu City’s development this year. The projects were included to encourage councilors to defect to the PPM.

He described the development projects as mere dreams, and called on the government to spend on regional development, too.

JP MP Abdulla Riyaz meanwhile noted none of the five islands in his constituency had sewerage systems. Several projects had been promised in the 2015 budget, but were no longer included in the 2016 budget.

Several MPs called on the government to impose income taxes.

Minority leader Ibrahim ‘Ibu’ Mohamed Solih, backing the proposal for income taxes, said Yameen’s administration is surviving on the tax reforms instituted during former President Mohamed Nasheed’s government.

He criticized the PPM’s rejection of opposition proposals.

MDP MP Mariya Ahmed Didi, describing PPM MPs as a rubber stamp for the government, said: “Our MPs and others submitted several revisions at committee stage, raised questions, but the budget was passed as it was.”

She criticised the allocation of funds for a facility to implement the death penalty, build solitary confinement cells and new prisons over development. MDP MP Eva Abdulla censured the lack of funds for judicial reform, and said the government must focus on improving transport links between islands instead of a bridge between the capital and the airport.