Toribiong in an interview said that combined salary reductions ranging from $20,000 to $30,000 will be enough cushion to prevent layoffs and cutting government hours due to the government’s bid to balance the budget suffering from a deficit.
In an earlier interview, Vice President and Finance Minister Kerai Mariur said that to further reduce government spending, workers’ layoff and reducing government hours are the most likely scenario.
He said though that layoffs and hours reduction’s effects could trickle down to the local vendors who rely on the government.
Mariur said the government has already made severe cuts on its spending to ensure that it will stay within the budget.
He said the government owes money to the local vendors and as a result, the private sector is also suffering.
The government has unpaid obligations of at least $10 million, the government is looking for source of funding to retire these debts.
Mariur said Palau needs new money to stimulate its economy. He said in order not to accumulate further debts the government could hold off issuance of purchase orders.
But the president said that government officials salary has to be cut in order to avoid layoffs.
He said he is willing to cut his salaries and that of his ministers and other members of his administration.
He said he will suggest to lawmakers to do the same.
