KOROR (Palau Horizon) – President Tommy Remengesau has asked the leadership of the country’s legislature, the Olbiil Era Kelulau, to stick to their commitment regarding Palau’s budget system.
The president says he is trying to avoid confusion over recent reports that the country is in a financial crisis.
He said lawmakers had made a commitment to closely cooperate “on very important budget matters” now pending in the OEK.
“Our leadership must immediately deal with Palau’s very significant revenue shortfalls in line with the Memorandum of Commitment we signed in conjunction with the Fiscal Year 2002 Annual National Budget Authorization and Appropriation Act,” Remengesau said.
Differences between the administration and the OEK apparently stemmed from a bill submitted by Remengesau to amend the FY 2002 Budget Act. The president said he wanted “financing flexibility” for general fund operations, particularly those funded by Compact funds.
Lawmakers said the bill is a supplemental budget but according to Remengesau, he was merely seeking an “adjustment” in the budget system
Vice President Sandra Pierantozzi and Administration Minister Elbuchel Sadang have been asked by Remengesau to work with the OEK leadership regarding the issue.
According to the president, there is a need to review all available budgetary options which include but not limited to the use of the Compact Trust Fund investment earnings available in fiscal year 2002; the issuance of medium-term bonds and short-term loans, or a combination of both; other revenue generation and expenditure reduction options.
“I would propose that (they) finalize…recommendation as soon as possible and present (them) to both houses of the OEK and to me and to use these recommendations as a guideline for the development of an appropriate budget amendment bill,” the president said.
He earlier urged the OEK leadership to act on comprehensive tax revisions to upgrade and modernize the country’s tax laws and expand its tax base.
