By Richardson Dhalai Friday, August 31 2012

While he did not give away any details, Finance and Economy Minister Larry Howai has cautioned the nation against expecting a balanced budget saying the 2012/2013 fiscal package would follow that of previous years and be a deficit budget.

Howai, who is expected to deliver his maiden budget at a still undisclosed date, was speaking to reporters following the official opening of State-owned First Citizens’ newest branch at 27 Penal Rock Road, Penal on Wednesday evening.

“I still need final confirmation from the Prime Minister about the date but we are progressing well. We are on schedule with our own deadline so we expect that as soon as we get the all clear, we will be able to announce something,” Howai said when asked when the national budget would be presented to the nation.

But asked whether it would be a deficit budget, he said, “Yes, I expect that we should end up with a deficit.”

“It will be a little too early to push the economy into a balance as that will create a lot of dislocation within the economy, so what we will do is have a programme to get us into a balanced budget as part of the medium term fiscal framework, but certainly this year will not be able to get to a balanced budget this year,” he said.

Asked which ministry could expect the largest allocation, he said, “I cannot say which ministry will get the largest chunk of the pie.”

However he noted the Finance Ministry was in constant consultation with the Central Bank saying, “when we need information to complete our analysis, all of that is part of the process.”

“I will not signal anything just yet,” he said, adding, “when you read the budget, stay tuned and you will get all the information then.”

And while admitting that he was enjoying his duties as Finance Minister, Howai noted the ministry was “pretty hectic and stressful” saying he had to learn his new duties “very quickly.”

“I’ve had less than two months to put together the budget and that has been a challenge and of course trying to deal with all the legislative issues that will come up, the FIU legislation and becoming accustomed with Parliament and Senate and understanding how the ministry works and trying to streamline some things and respond to the needs of all the other ministries, so yes, its been a hectic two months.”

Having worked in the private sector, as the managing director of First Citizens, where things got done relatively quickly, Howai said the bureaucracy was still an issue he had to deal with in the public sector.

“Getting simple things done sometimes require parliamentary approval, to do something that I might think is simple and private sector you will be able to do right away. It’s trying to understand some of those things and determine how best we can maintain accountability, transparency and responsible approach to things, while at the same time trying o stream line so that we get as much efficiency as possible,” he added.

Trade, Industry and Investment Minister Vasant Bharath, who is also a Minister in the Finance Ministry, said a deficit budget is what most would have expected.

“It would be almost impossible to have gone from a seven billion dollar budget position that we when we came into office to a zero budget, a deficit budget in a two-year period,” Bharath said, adding, “but as I say we have plans in place for generation of economic activity.”

Asked which ministries may receive larger allocations, Bharath said, “Clearly there are specific ministries that need more than most — crime (prevention), education, health, those are the major areas that have traditionality had monies poured into it but I think the important thing is not how much money you pour into it but how you utilise the funding, how you focus on spending it in a productive manner.”

Bharath also noted Government had inherited a number of social programmes which had to be included in the budget.