President Johnson Toribiong submitted the budget bill to Congress Friday saying that the it has been formulated in line with his policy that the government should “live within its means.”
“Therefore this budget takes into account the effects of global economic recession and that fact that the republic likely will receive as much as $4 million less in the local revenues that it has received in the past.”The president added in his transmittal letter to leaders of Olbiil Era Kelulau (OEK) that the budget has been formulated in anticipation that effective Oct. 1, 2009, the funding received by Palau from the United States under the Compact of Free Association will cease.By Oct. 1, the republic will only be able to draw down $15 million from the Compact Trust Fund.Toribiong said once the U.S. Congress passes the funding for the Compact extension he will work with OEK to amend the bill or submit a supplemental budget.“Notwithstanding the reduction in the appropriation, I am requesting for this coming fiscal year, I am confident that under this budget the national government will be able to perform the services that the people of Palau require and that the national government will be able to meet its payroll obligations,” Toribiong said.He added, ‘for one thing , the republic will not be plagued by the massive shortfall it faced this year as a result of the last administration’s multimillion dollar payout to retire prior years’ debts.”The measure however authorized the sum of $1,500,000 for low- income household assistance for low-income families.An amount of $600,000 is authorized for the hosting of Micronesian Games in Palau in 2010.The president has also asked Congress to take prompt action to restore the social security benefits for those who have been stripped off of their benefits by the passage of RPPL No. 7-32.The president also asked the lawmakers “in finding ways and in taking affirmative action to increase the tax base in Palau so as to generate more tax revenues to sustain our government activities.” The government expect a shortfall of $9 million including a local revenue deficit of $4 million. The president has urged lawmakers to act on revenue generating bills pending before both houses such as the Shipping Registry, Corporate Registry and Foreign Investment Act.
