Vice President and Finance Minister Kerai Mariur in an interview 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.
Earlier, President Johnson Toribiong requested for an additional budget to pay for excessive costs and expenses incurred during Fiscal Year 2009 due to the rising costs of electricity and fuel.
The president justified the additional budget due to the cost and expenses which were “unavoidably” incurred.
Congress however did not act on the measure, thus killing the measure explaining that FY2009 is over.
Congress opened its 4th regular session Tuesday, it did not calendar nor re-introduced any supplemental budget measure.
Mariur said Congress always have the option to enact the legislation to authorize and appropriate money for the supplemental budget despite end of FY 2009.
Toribiong said he will meet with the leaders to discuss proposed supplemental budget.
Lawmakers said the bill was sent to Congress almost at the end of FY2009.
In Toribiong’s request, $1,011,800 is requested for water and sewer operations while the amount of $462,500 for the Capitol Complex electricity and maintenance and remaining balance of $334,119 for other governmental operations.
The president said the money could be taken out of inflation Adjustment Fund Compact and from the remaining balance of the Mega Bank Loan.
$1,165,000 will be derived from the Inflation Adjustment Fund and the $635,419 will be taken out of the Mega Bank loan remaining balance.
The president in his transmittal letter said that the money is needed before the end of the Fiscal Year which is Sept. 30.
Mariur said there is a need to fund these services especially the sewer operations.
President Toribiong said there is a need for a supplemental budget, he said the previous government had already used up 40 percent of the FY2009 when he assumed the presidency.
The president wants the president’s office budget to increase from $650,000 to $775,019 and the grants coordinator office from $68,634 to $85,834.
