Govt salaries get largest chunk of re-allocated money

03 Nov 2015 19:00pm


Government has identified a total of N.dollars 4 billion of internal savings in the 2015/16 financial year for reallocation to urgent priorities.

Readjustments of Government salaries followed by bush allowances are to receive the largest amounts of reallocated funds.

Finance Minister Calle Schlettwein said this while tabling the Appropriation Amendment Bill of 2015 during the Mid-Year Budget Review in the National Assembly (NA) here on Tuesday.

The Bill will be used to amend the Appropriation Amendment Act of 2015 to increase and decrease certain amounts of money to meet the financial requirements of the State during the remainder of the 2015/16 financial year that ends in March 2016.

Government realised net savings from 27 votes out of 35 votes after internal re-allocations within each vote was considered to enable Government to scale-up resource allocation to urgent priorities.

"The proposed reallocation within and across budget votes is aimed at enhancing the quality of spending and reduce opportunity cost of budgetary allocations to non-core items," he said.

The minister noted that internal reallocation of about N.dollars 775,3 million and N.dollars 218,9 million are apportioned to all votes to cater for salary adjustments and bush allowances, respectively in accordance with the agreement reached between Government and labour unions.

The finance minister highlighted that spending adjustments made for the Ministry of Health and Social Services have been reallocated to scale-up allocations for the purchasing of anti-retroviral (ARV) drugs and other pharmaceuticals to supplement current budgetary provisions.

A total of N.dollars 500 million is allocated for ARV drugs and other pharmaceuticals. Schlettwein said an amount of N.dollars 458 million is allocated to the Ministry of Agriculture, Water and Forestry (MAWF) to fund the fast-track compilation of the Neckartal Dam that will unlock irrigation activities.

A further N.dollars 210 million will be made available to compensate for the vote (agriculture, water and forestry) funding for the combating of foot and mouth disease (FMD) in the northern parts of the country.

Under the Office of the Prime Minister, a total amount of N.dollars 531 million is allocated to the Drought Relief Programme; N.dollars 121 million for the Land Servicing Programme in the pilot towns of Windhoek, Oshakati and Walvis Bay; and N.dollars 166 million is allocated to the Ministry of Urban and Rural Development for mass housing contracts under the Mass Housing Project.

TransNamib is to receive N.dollars 291 million for the lease of locomotives to improve efficiency of cargo services and rail transport, while N.dollars 495 million is allocated to anti-poaching activities.

The Mid-Year Budget Review provides an opportunity during October/November to revisit and, if necessary, to review the key macro-economic variables and assumptions on which the main budget framework was based, such as domestic and global economic activity, inflation, exchange and interest rates, commodity prices.

Based on this, the finance ministry may want or may be compelled to change the revenue forecasts and projected spending for the remainder of the year and even into the Medium-Term Expenditure Framework (MTEF).

The Mid-Year Budget Review thus enables the Treasury to review revenue collected and budgeted expenditure spent over the first six months of the fiscal year. It also allows for reallocation of funds from slow spenders to other priorities within the stipulated Vote ceilings.