The budgetary objectives are clearly to bring revenue in line with
expenditure or vise versa, balancing the budget, while improving living
standards across the population, hence, an analysis of year on year changes can
be very inadequate. The new budget effects are better understood by focusing on
mission clusters with specific priorities, which can be identified by the size
of financial allocations, but this takes time.
Such Mission Clusters or Groupings are identified by revenue and
expenditure: Revenue clusters consist of Tax and Non-Tax Income; inclusive of
income from lending activities, Capital Receipts; realized from divesting state
assets, and Deficit Financing; funds coming in from borrowings and withdrawals
from the society’s savings. Expenditure groups are focused and places priority on
Governance; housing public officers, Fiscal Policy; the infrastructure
development fund, Resource Preservation; the police service remuneration and
supplies, Human Development; poverty reduction via food cards, Infrastructure
Management; water works, and Economic Drivers; fuel subsidy.
Tax and Non-tax Income 72.59%
Under the direct control of the elected executive or cabinet, these
charges on all economic activities; sales and consumption, purchases, import
and export, salaries and wages, energy and transportation, tourist arrivals,
property services and, of course, profits, are to fund the society's needs and
wants. Certainly, global supply or demand issues are not, in any sense, under
local control, and definitely not international prices, which can erode entire
sectors' and industries' profitability, causing operation closures, job layoffs
and depleting tax and non-tax collections to such a state that, higher rates,
must be considered on any remaining or surviving activities. The executive has
estimated 72.59% of its total projected revenue, for this fiscal period, to
come from such tax and non-tax collections, which requires expanded
productivity, job creation, profitable companies and motivated investors.
Capital Receipts 16.67%
The plan calls for the realization of 16.67% of total estimated
revenue, for this fiscal year, to come in from gains on financial assets.
Skillfully and strategically divesting; all of, the majority share in or
minority portions in, presently held state assets to others that can enhance
operations and/or market access, to earn additional one time revenues from
share pricing, without giving up ultimate control, is very much about
strengthening regulatory oversight into the particular industry.
Deficit Financing 10.74%
In the case where total revenue does not reach the required level of
projected expenditure, deficit financing must be found; hence, in this fiscal
period 10.74% is estimated to be needed to enhance expected revenue. Using
various financial instruments to borrow, from international or domestic sources
in local or foreign currencies, for the general operation of the society is to
fund shortfalls in revenue generation, not to expand existing expenditure. The
necessary borrowings, via Government backed bonds, must be able to increase
future revenue more than it will expand debt servicing expenditure. Building
new or expanding sectors and industries is traditionally expected to be funded
by facilitatory concessions to investors or from withdrawals of previous
savings.
Governance 4.39%
Moral leadership, daily supervision, making new and strengthening
existing laws, regulations and rules, implementation and reporting, checks and
balances, all this is about prioritizing, focusing resources on needs and wants
before nice to have, while preserving a principled reputation. Flowing from a
highly confidential strategic plan, with a five to ten year outlook, consisting
of numerous timely extracts, the financial budget is highly dynamic with short
and medium term events causing adjustments. In this fiscal year, 4.39% of the
total estimated budget is assigned to such governance activities, with 21.34%
of that being spent in the management of adequately and safely housing public
officers.
Fiscal Policy 28.2%
Triggered by traditional revenue sources, increase or decrease, the
budgeting division in the finance ministry must constantly eye cash flows, debt
servicing and pensions, and along with the central bank, which is in charge of
monetary policies; currency values and commercial interest rates, must estimate
and manage expenditure going forward and honoring previously made obligations.
The public debt situation forces 28.2% of this fiscal period total expenditure into
debt servicing and managing the society’s fiscal policy, while 16.48% of this total
is moved into the Infrastructure Development Fund to facilitate unplanned or
future modernizing works.
Resource Preservation 13.05%
Circumventing social disquiet, providing emergency responses,
protecting property and borders, rehabilitating prisoners, instilling
discipline and respect for laws, enforcing rules and regulations, preventing
and detecting crime are vital needs of the society. Such resource preservation activities
have been allocated 13.05% of the society's expenditure in this fiscal year,
with 39.22% going directly to the police service remuneration and supplies.
Human Development 28.9%
The society looks to its leaders in matters of health, education,
social benefits, community development and sports, with 28.9% of the
expenditure budget allocated in this current fiscal year, to human development.
The goals are to have a healthy population; promote wellness, prevent
epidemics, reduce chronic disease, provide emergency, surgery and recovery
services. The population is also provided with basic education opportunities for
life. A greater emphasis is placed on social services with 27.31% of the total
human development budget geared to poverty reduction, via; food cards. Programs
are also designed and executed for cultural, art and sport development focused
within communities.
Infrastructure Management 19.97%
The maintenance, analysis, design and building of existing and new
structures and the operation of public utilities, works and transportation, all
fall under this grouping. Producing water fit for human consumption, generating
and distributing electricity, maintaining bridges and roadways are wants that
have become essential and demanded by the population. Most other structures and
public spaces are further identified as housing, urban and rural development
and are maintained, renovated, refurbished and constructed, overseen by local
Government with a keen eye on the surroundings. This fiscal year estimates have
allocated 19.97% of the budgeted expenditure to such infrastructure management activities
with 15.02% of that assigned to water works.
Economic Drivers 5.48%
The investment climate is ruled by such industries and sectors that operate
with a global competitive advantage. An allocation of 5.48% of total
expenditure has been assigned in this fiscal period to grow such sectors and
industries, while 25.87% of that focuses on a social benefit; fuel subsidy. The
Agribusiness sector, born of a need to feed its local population and offer some
level of domestic food security, must mature to produce specialty Goods and
Services and offer these internationally. The home construction sector must
attempt to fill local demands, fostering experience and expertise closely
monitored by planning engineers, such services can, then, be sold around the
world. Other drivers must be incubated to carve out its own global niche based
on access to raw materials, energy, skills, talents and technology, finding
support from labour unions and trade experts and facilitated in its promotions by
foreign affairs missions.
Conclusion
Five to ten year budget projections, with very conservative revenue
growth forecast, indicates numerous years of continuing deficit financing to
maintain the society's, hard to give up, present lifestyle. It clearly must be
stated that, it is the Executive branch of Government, through such budgetary
allocations, that must firstly signals its interest globally to expand and/or diversify
the economy; establish new sectors and industries. Publishing a prospectus
specifically to inform the population of revenue generating measures; increasing
productive capacities or incubating new ideas, selecting proven operations for
scaling up and promoting such activities to attract investment, which would, in
turn, create jobs, grow the tax collection base and avoid the all foreseeable
debt trap.
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.
