An independent office of budgets can forecast the executive’s plans and priorities without undue influence being placed on the figures. All development plans and request for increases in administrative funds from local or national and every branch of Government is cost by this office and reflects the projected revenues and of course, the earnings surplus or deficit. This office of budgets is not responsible for the calls (the types of projects or the salary increases) or the earnings (the taxes charged or collected). The job is to publicly report how the executive branch policies would affect the public purse, 1-5 years, and going forward.
A society which depends on a mix of socialism and capitalism, must educate its population. The elderly, the vulnerable, the productive class, the future category, all depend on its Government; the Parliament or Law makers, the Judiciary or Law enforcers, the Executive or Policy makers, to deliver peace, justice, stability and development, constantly improving living standards, in a single word,
Happiness.
Statutory Bodies,
constitutionally created or established by an act of Parliament (the
legislature), such as; the office of the President, the Judiciary, the
Parliament, the office of the Prime Minister (The Cabinet), the Public
Administration and various supporting commissions, protected by the Defense
Force; Army, Coast and Air Guard, the Police, Prisons and Fire Services, with the
necessary support from Public Utilities Providers, along with Public Debt
Servicing, all have first call on the national treasury 43-53% of expenditure and offers essential services but provide no
substantial revenue generating activities.
Social Programs 20-26% of expenditure, administered under various
Ministries of the Executive branch, inclusive of social commitments; health and
education, must be met; Old age pension/grant, Disability grant, Chronic Disease
Assistance Program, the Food Card, School Feeding Program, Tertiary Educate
grant, Scholarship programs, Community Enhancement Program, Unemployment Relief
Program, Public Transportation, Unemployment Levy/Grant, National Insurance
contributions/payments, all specifically designed to directly improve living conditions
of the people in need, but again, even with honorable attempts made to balance
income and expenditure, provide no substantial revenue into the national
treasury.
Development
Programs, consisting of construction and maintenance of numerous multipurpose
infrastructure, facilities, housing, roads and transport 6-5% of expenditure, is mainly to improve efficiencies
reducing recurrent cost. Controlled by many public executing organizations,
such as; Water and Waste Management, Electricity Distribution, Industrial and
Housing Development, Urban and Rural Development Regional Corporations, Public
Transportation, Vehicle Maintenance (maintaining and repairing all public
vehicles), all funded through transfers and subsidies 46-40%
of expenditure from the relevant line Ministry and through the award of
contracts to private sector entities. Such projects are mostly financed by low
interest foreign currency debt, which still calls on the treasury at scheduled times
for principal repayments and interest expenses, also due in the same foreign
currency.
Revenue Collection
results from taxes, duties, royalties and investment income. Ministries of
Agriculture, Energy, Tourism, Trade and Industry administer revenue generating
activities facilitating competitiveness while, charging sales based Value Added
Tax, profit based taxes (corporation, business levy and green fund) 71-63% of income. Such revenue along with Individual
taxes, Duties on imports and Royalties on licenses are administered by the
Ministry of Finance into a consolidated fund without designation, while, real
estate taxes and other user fees are assigned to specific purpose accounts in
the national treasury. Interest Income is generated from reserves, Pension Contributions
or savings where money, both local and foreign currencies are put to work to
yield a competitive return. State Enterprises, such as; Energy and Fuel
Corporations, Air and Sea Transport Companies, Broadcasting Media, are
commercial operations in which the state invested and owns more than 50% of the
equity and hence, expect Dividend Income.
The nation must pay
its Statutory Bodies simply to function, its Social Programs to avoid unrest,
manage its Development Programs to gain efficiencies and maintain its
infrastructure, maximize its obtainable Revenue Collection and currency
reserves, and manage the public debt, all to achieve a balanced budget.
Traditional management studies teaches, that when revenue indicators (Oil and
Gas Prices) point negative 48-37% of income, to
cut expenses, sell assets, root out corruption, increase maintenance and focus
on value for money. This approach invites many harmful results, unless coupled
with a genuine exploration of a new mix of revenue streams driven by existing
competitive advantages.
The answer must be
in a well managed Investment Portfolio. Successive administrations must seek to
generate sustainable Interest and Dividend Income as its greatest revenue
source, increasing projected capital receipts from
2-15% of income to 20-25% of income in the next
decade. This can be done by investing in the establishment of growth industries
and/or sectors, launching and incentivizing lucrative business opportunities and
creating jobs, and in the shortest possible time, opening the investment to
Employees/Unions and the general public on the local stock exchange, to replenish
the national treasury. At the same time, the executive must take the hard
decisions to resize or dispose of uncompetitive industries or enterprises,
replaced by paying for essential products through measured but reducing subsidies.
All fully put forward without external forced policy changes, by an independent
apolitical legally established statutory body with only the best for the nation
in mind.
It falls to an
independent Office of Budgets to pick up where the Auditor General has reached
and cost and price policies as they are proposed, consolidate, forecast and
report to the population at large on the effects of such policies in the short
medium and long-term. This will guide politicians on the best economic policies
for the nation beyond an election cycle, reduce waste and corruption. Hence, a
Budgetary Forecasting office is very necessary to view the big picture,
understand civics, cost policies, review the said policies effect on the
overall financial picture and disseminate the review, before any implementation
can proceed.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
