Assembly approves R303 million supplementary budget estimate |23 September 2021

Leader of government business (LGB) Bernard Georges yesterday brought a motion to the National Assembly to approve a supplementary estimate of R303,911,788.83 for the year 2021, and it was eventually approved by 22 votes.

Hon. Georges presented the motion in accordance with Article 154(6) of the Constitution, and in doing so detailed the Constitutional and legal provisions under which the supplementary estimate motion was laid before the assembly, noting that this is the norm to manage overspend, and expenditures which were unforeseen when the budget was passed.

The major heads of the supplementary estimate are Wages and salaries at R39.8 million, goods and services at R174 million which is to be repartitioned between numerous ministries, departments and agencies, R55 million to the Seychelles Agricultural Agency (SAA) as subventions to farmers with shortfalls, R104 million for the Ministry of Foreign Affairs and Tourism with the absorption of the Seychelles Tourism Board (STB) in the ministry, R29 million for capital projects.

Additionally, the supplementary estimate makes provisions for R27 million to the Seychelles Public Transport Corporation (SPTC), R14 million to the Agency for Social Protection (ASP) for programmes geared at persons with limited functionalities, and R16 million in subscriptions to international organisations.

Secretary of state for Finance, Patrick Payet, noted that while the economy has improved, borrowing is still a reality.

“We are still running a budget deficit, we are not yet at a surplus, but the deficit that we have projected for the year has reduced. We had projected a primary balance of 11.8 percent deficit but this has reduced with the mid-year review, the supplementary, and the budget cuts we are making, to 7.6 percent. However, we are still borrowing money. Overall money being borrowed with the revised budget for 2021 is R2.4 billion with our development partners, as well as the domestic market. Therefore, we are still running a budget deficit, and although this has been reduced, we are still borrowing,” SS Payet said.

There has been an increase in tax revenue collection for the year, and overall total revenue, but at the same time our grant has reduced. With regard to tax, an estimate for which we revised the projection is about R417 million more,” SS Payet noted.

Members of the assembly during the debates sought more information about the different heads and the entities to which the sums are to be allocated. Considering the reforms and restructuring within public service, members were particularly concerned with the wages and salaries head, provisions for compensation for continuous service, and gratuity payments among others.

SS Payet noted that the R14 million allocated for disability benefits is to allow the entity to make internal changes so as to fit and better provide for persons within the group, as per the World Health Organisation’s (WHO) definition of disability.

With regard to the allocation to the SPTC, SS Payet noted that should the hike in bus fare not go ahead on October 1, the ministry would have had to subvention R90 million to the public transport provider in the budget. SPTC was already allocated R50 million and with the R27.4 million allocation in the supplementary budget, this will total in at R77.4 million. The amount in subventions to the entity will be reduced in next year’s budget, he assured.

SS Payet clarified that there will not be any salary increases over next year, on account of the slow rate of economic growth, and the already high wage to Gross Domestic Product (GDP).

Debating on the motion during the afternoon, Hon. Audrey Vidot, United Seychelles (US) representative, questioned why certain programmes are being neglected, how programmes are to continue with the dissolution of different boards.

Other US representatives also spoke at length about the removal of subventions for services, which they argued will further worsen things for the most disadvantaged among the population.

Hon. Sylvanne Lemiel, elected US member for Anse Royale, noted that the majority of the savings come through capital projects, at around R800,000 of the R1.4 billion savings. The other major saving she said is R71.1 million, stemming from delays and difficulties in recruitment within ministries, departments and agencies.

“We were informed that of 498 positions within different ministries, only 144 posts were filled, and today, we are observing that redundancies are still happening within MDAs,” Hon. Lemiel highlighted.

Similarly, leader of the opposition in the National Assembly, Sebastien Pillay, stated that the savings made by government are from grants that did not fall through, and that it is therefore misleading to say that the administration has made any cost-savings.

“What is important is we need to realise that we have to ensure the funds go towards what they are dedicated to. When I consider the capital budget, the repercussions of the non-capital budget we will feel next year,” Hon. Pillay asserted.

For his part, Hon. Wavel Woodcock spoke about the state of the economy and progress made through the administration’s decisions such as the vaccination against Covid-19 and reopening of the country to the world, with positive economic implications.

As per Hon. Georges, the constitution allows government to either spend before seeking retrospective permission for the expenditure, or to before the spending, come before the assembly to seek approval for the expenditure.

Despite constitutional provisions, Hon. Georges noted that the practice of seeking retrospective permission is discouraged unless in emergency situations, and government is encouraged to seek assembly authorisation through a Resolution of the Assembly, and prior to spending.

Hon. Georges went on to detail the process, which officially started with the mid-year review, whereby the Minister for Finance, Economic Planning & Trade, Naadir Hassan, laid before the assembly the supplementary appropriation. Motion debates constitute the second phase within the process, while the third phase is to be realised next year, as the Constitution states that if the assembly approves the motion, the Supplementary budget Bill will be tabled before the assembly in the year following the resolution.

In rounding up the motion, he thanked the ministry and all involved for having prepared the budget within the short time frame requesting R303 million, while they have also found means to save R1.2 billion, “a momentous feat achieved by a government within one year”, Hon. Georges added.

SS Payet was joined by Controller General of Financial Planning and Control Division Irene Croisée and deputy Controller General Astrid Tamatave.

Laura Pillay