Member of Parliament for the Guraidhoo Constituency Mohamed Ghassan Maumoon have stated that the government's plan to reduce cost involves withholding subsidies and financial aid from the people of the Maldives.
Debating the 19th Parliament Budget Committee appraisal report on the proposed budget for 2023, MP Ghassan stated that mindful of the concerns raised by international financial institutions, the Ministry of Finance included cost-reduction measures in the budget for next year.
Ghassan highlighted that all cost-cutting measures proposed by the state attempts to withhold aid and subsidies from the people; reducing MVR 1 billion from fuel subsidies to fishermen, MVR 460 million from Aasandha, MVR 1.6 billion from civil servant salaries in the name of “pay harmonization”, and MVR 150 million from electrical subsidies. He added that the government hopes to generate these funds with the levied tax increase from the people.
Ghassan noted that the parliament had approved each budget proposed by the government over the span of their term. However, by intermingling fiscal policies with the monetary policies along with falling short of generating estimated revenues for each year, Maldives has acquired a debt of MVR 13 billion per year on average.
Ghassan explained that the annual budget estimates the expenses and income for the state for the coming year, alternatively acting as an economical roadmap for the potential investors coming to Maldives, therefore, the process of drafting and approval of the budget must follow the guidelines clearly laid out in the constitution.
Ghassan stated that although the government estimates an income of MVR 32 billion with next year’s budget, as the state has never generated an income of more than MVR 30 billion, the projections were impractical and doubtful.
Quoting the estimated MVR 23.5 billion from tax revenue included in the budget proposal, Ghassan stated that considering the fluctuations and state of the global market and as Maldives’ largest tourism market, China, is still closed off, the state may not achieve their tax targets for next year either.
Furthermore, despite the MVR 2.4 billion estimated in grants for next year, even the Auditor General’s Report had raised concerns over the government collecting only 8.5 percent of their grant targets this year.
Highlighting the surge of recurrent expenses, Ghassan stated that the administration intends to spend MVR 28.6 billion on recurrent expenses, which is 67 percent of the total expense budget. He stated that the government spent MVR 15 billion on recurrent expenses in 2013 and the amount rose to just MVR 18 billion by the year 2018.
Ghassan speculated that during that former President, President Abdulla Yameen Abdul Qayyoom’s administration, recurrent expenses increased by just MVR 3 billion and over the last four years of President Ibrahim Mohamed Solih’s administration, these expenses have increased by MVR 10 billion.
Noting the acquisition of MVR 60 billion debt from the internal markets within the last four years, Ghassan asserted that these funds were available capital in banks for home development for locals. He argued that utilizing these funds takes money away from the people as trust is lost between Maldivians and international parties.
As a result, Ghassan stated that the national reserve held 45 days worth of funds, which should frankly surprise and outrage the Maldivian people. Ghassan asserted that unless the administration changed its course of action, there was no hope for national redemption.