A FORMER central banker and retired auditor general has described as “false assurance”, the $364 million budget surplus the government claimed it made in the first quarter of this year.
Government media consultant Alfred Sasako released a statement Monday on the reportedly surplus, describing it as a “major economic victory” for the government.
He quoted Finance and Treasury minister Snyder Rini as saying “this is new money that’s been added to and injected into our economy”.
But Edward Ronia, a respected figure on financial matters, told the Solomon Star it is grossly misleading to send out a message like “A Major Economic Victory”.
“It should be common knowledge for a long experienced Minister of Finance handling the government budget and financial systems that, in the first quarter there will always be a surplus for the obvious reason that expenditures are minimal compared with the budgeted provisions for the beginning of the year period,” Mr Ronia said.
“Another strong reason is that many expenditures that are already committed have not yet appeared as expenses in the government books of account,” he added.
“This proclaimed surplus amount of $364 million will be swallowed up in the next quarter when all the expenses already committed will appear in the books of account.
“This message will lure unnecessary pressure on the financial system, especially on the government cash flow, for unnecessary spending from leaders with loose attitude regarding expenditures.
“The Minister of Finance may have shared figures that appeared on the government books of account that has no economic impact.
“The seasoned journalist, wanting to impress the public, took it out of context to blow up a figure that has nothing to do with economic victory at all,” Mr Ronia said.
He said the surplus would make sense if by the end of the government financial year Mr Rini and Mr Sasako could proclaim that the government has made at least a surplus of $1,456.0 million ($364m x 4).
“Only then will I concur that there was a small economic happenstance in the right direction.
“What economic victory is there from a figure that appears today and gone tomorrow?
“This nation has been falsely and repeatedly assured of surplus budgets during every budget speech by past Ministers of Finance every year, but we are yet to see one.
“The onus is on the Minister of Finance to ensure that there is a surplus at the end of this financial year if the ‘economic victory’ message is worth noting,” Mr Ronia said.
He said all the Ministries of the government are well aware that this figure does not represent economic viability of the government financial system because a lot of their planned activities will not be accomplished because of limited funds in the government financial system.
“I hope by August this year the Minister of Finance will not seek a Supplementary Appropriation Bill for extra funds to spend because he is making a surplus this financial year.
“My best advice would be for the government highly paid journalist to assess the quality of his public pronouncements well before he gives false assurances to the nation.
“As for the current assurance, the nation is being misled.”
By DENVER NEWTER
