KOROR (Palau Horizon) – The proposed Fiscal Year 2010 budget will be less than the 2009 budget due to the anticipated revenue deficit.
In a legislative meeting between the Executive Branch and members of Congress on Tuesday, the president said that the budget is now being prepared by the Finance Ministry and will be submitted to Congress during the July session.
The Fiscal Year 2009 budget amounted to $58.3 million, the Executive Branch will be submitting less than the amount.
The governmentexpect a shortfall of $9 million including a local revenue deficit of over $3 million. The rest of the expected shortfall was due to the expiration of Compact funds from the United States.
On Monday, Toribiong ordered a freeze on government travel, hiring of new employees and unnecessary government spending.
Toribiong issued Presidential Directive No. 09-04 saying that the country will be experiencing a shortfall thus a need for tightening of belts.
He said the whole country should undertake cost cutting measures and the government have made every effort to cut spending.
The president directed that there will be a freeze on all hiring that require the use of funds derived from local revenue accounts.
All purchases requiring the use of funds derived from local revenue accounts are also restricted requiring the use of funds derived from local revenue accounts.
Spending should be restricted to essential expenditures.
Earlier Vice President and Finance Minister Kerai Mariur said that the Fiscal Year 2010 annual budget will be submitted during the July regular session of the Olbiil Era Kelulau.
In the meeting the president also projects that Palau government will most likely consider a supplemental budget depending on the action of the United States Congress that is currently considering Palau’s extension of funds under the Department of Interior.
The president also urged lawmakers to act on revenue generating bills pending before both houses such as the Shipping Registry, Corporate Registry and Foreign Investment Act.
The lawmakers agreed to work together for the benefit of the Republic of Palau especially during these hard economic times.
