FINANCE Minister Saara Kuugongelwa-Amadhila will next week lift the lid on whether Government has produced a Budget surplus for the first time ever.
She announced in the National Assembly yesterday that she will table the 2006-07 Appropriation Bill, which allocates State money to Government ministries and agencies, in the National Assembly on Thursday. The Minister should reveal whether Government has met its aim of a projected surplus of N$511,8 million for the 2005-06 financial year.Last year Kuugongelwa-Amadhila not only promised a Budget surplus, but to boost Government revenue to an unprecedented N$13,4 billion – N$1 billion more than it has been in recent years.The projection was based on an economic growth rate of four per cent, which Government expects to be the average until next year.But in December the Bank of Namibia reported that the economy had performed poorly during the third quarter of 2005, with the Gross Domestic Product (GDP) recording a decline of 2,6 per cent compared to a significant growth of 13,4 per cent recorded at the same time as the previous year.Economic performance was also viewed as sluggish considering the 6,4 per cent growth in the second quarter.According to Government’s three-year rolling Budget projections, its expenditure should not have exceeded N$12,97 billion in the past financial year, to result in its first Budget surplus.In the next financial year (2007-08), Government is again expected to produce a Budget surplus when State spending is expected to amount to N$12,99 billion.Such a situation would result in a surplus of N$394 million.By the end of 2003-04, however, Kuugongelwa-Amadhila had to inform Parliament that the Budget deficit for that year had increased from the projected four per cent of GDP to 7,5 per cent.She expected the Budget deficit for the 2004-05 financial year to be 2,4 per cent of GDP, Kuugongelwa-Amadhila said last year.Over the last year, Government was expected to curb overspending and unauthorised expenditure through a variety of means.Kuugongelwa-Amadhila said at the time of tabling the last Budget that low Budget deficits and low levels of public debt would promote economic growth and were essential for reducing poverty and improving social outcomes.Government also said last year that it aimed to bring down Government debt to 30,2 per cent of GDP in 2005-06 so that it would reach a target of 27,6 per cent of GDP by the end of the 2007-08 financial year – still higher than the 25 per cent of GDP Government has aimed for over the years.During 2003-04 Government debt grew by 17,4 per cent to total N$12 billion by the end of March 2005.Last year the Finance Minister imposed higher taxes on cigarettes, alcohol and luxury goods as one of the means to raise Government revenue.After informing the House of her intention to table the new Budget next week, Kuugongelwa-Amadhila also moved to remove the Financial Intelligence Bill from the table indefinitely.It has been up for discussion for the past two weeks, and during that time it has been brought to the attention of the Minister that some sections of the bill were missing from the copy they had been handed.On Tuesday, Attorney General Pendukeni Iivula-Ithana asked for the debate not to be stalled because of this, and said she believed the error was merely a printing gremlin and the missing sections could still be provided to MPs.Following Kuugongelwa-Amadhila’s request yesterday, the bill will have to be re-introduced at a later stage.The Minister should reveal whether Government has met its aim of a projected surplus of N$511,8 million for the 2005-06 financial year.Last year Kuugongelwa-Amadhila not only promised a Budget surplus, but to boost Government revenue to an unprecedented N$13,4 billion – N$1 billion more than it has been in recent years.The projection was based on an economic growth rate of four per cent, which Government expects to be the average until next year.But in December the Bank of Namibia reported that the economy had performed poorly during the third quarter of 2005, with the Gross Domestic Product (GDP) recording a decline of 2,6 per cent compared to a significant growth of 13,4 per cent recorded at the same time as the previous year.Economic performance was also viewed as sluggish considering the 6,4 per cent growth in the second quarter. According to Government’s three-year rolling Budget projections, its expenditure should not have exceeded N$12,97 billion in the past financial year, to result in its first Budget surplus.In the next financial year (2007-08), Government is again expected to produce a Budget surplus when State spending is expected to amount to N$12,99 billion.Such a situation would result in a surplus of N$394 million.By the end of 2003-04, however, Kuugongelwa-Amadhila had to inform Parliament that the Budget deficit for that year had increased from the projected four per cent of GDP to 7,5 per cent.She expected the Budget deficit for the 2004-05 financial year to be 2,4 per cent of GDP, Kuugongelwa-Amadhila said last year.Over the last year, Government was expected to curb overspending and unauthorised expenditure through a variety of means.Kuugongelwa-Amadhila said at the time of tabling the last Budget that low Budget deficits and low levels of public debt would promote economic growth and were essential for reducing poverty and improving social outcomes.Government also said last year that it aimed to bring down Government debt to 30,2 per cent of GDP in 2005-06 so that it would reach a target of 27,6 per cent of GDP by the end of the 2007-08 financial year – still higher than the 25 per cent of GDP Government has aimed for over the years.During 2003-04 Government debt grew by 17,4 per cent to total N$12 billion by the end of March 2005.Last year the Finance Minister imposed higher taxes on cigarettes, alcohol and luxury goods as one of the means to raise Government revenue.After informing the House of her intention to table the new Budget next week, Kuugongelwa-Amadhila also moved to remove the Financial Intelligence Bill from the table indefinitely.It has been up for discussion for the past two weeks, and during that time it has been brought to the attention of the Minister that some sections of the bill were missing from the copy they had been handed.On Tuesday, Attorney General Pendukeni Iivula-Ithana asked for the debate not to be stalled because of this, and said she believed the error was merely a printing gremlin and the missing sections could still be provided to MPs.Following Kuugongelwa-Amadhila’s request yesterday, the bill will have to be re-introduced at a later stage.
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