2017 Budget

Source: Vanuatu Business Review

A total of 14 pieces of legislation, including the 2017 budget bill, are on the order table for the 2nd Ordinary Session of Parliament, which is scheduled to begin on Thursday.

Among the highlights are a VT20.2 billion budget for 2017, an additional VT 1 billion for severance payments, international airport departure taxes to help pay for airport operations, and a complete overhaul of maritime sector regulation.

Next year’s budget is the only really must-pass bill on this crowded slate. If Parliament were to fail to pass a budget two years in succession, the country’s financial credibility would take a significant hit. Budget bills generally take several days of debate to pass, as they are effectively the government’s policy statement for the coming year. They deserve—and usually get—more attention from MPs than any other bill.

This year’s appropriation bill features an increased appropriation of 6.12% over 2016, and an increase in borrowing of 13.6%. Grants and aid in kind drop by more than half in 2017, largely due to the massive influx of assistance during 2016 that came in the wake of cyclone Pam.

In addition to this spending, another VT1 billion will be required immediately to provide severance payments for senior civil servants. Due to a peculiarity of financial reporting, severance payments for retiring civil servants don’t come onto the books until they become due.

This has led to an increasing volume of unbudgeted and unplanned expense, which the government is slowly beginning to address. Civil servants have long enjoyed favourable severance terms compared to other countries.

Amendments to the Civil Aviation Act allow the Ministry of Infrastructure and Public Utilities to levy fees from air carriers and airline passengers. Presumably, any new fees would be used to maintain airport facilities and pay down the nearly VT 6 billion loan from the World Bank, which has been used to fund recent emergency repairs as well as a planned upgrade of the Bauerfield airport runway to Code E status, which would allow long-haul, wide-body aircraft to land in Port Vila.

Amendments to the Decentralisation Act will allow for one provincial council seat in each province to be reserved to the woman who won the largest number of votes, but did not win a seat.

This would allow more than one woman to sit on the provincial council, but guarantees that at least one will always be present.

The Maritime Sector Regulatory bill establishes far-reaching powers for a proposed maritime sector regulator. This includes shipping and crews as well as ports and harbours. In practical terms, this should provide much-needed centralised oversight and management for complex issues such as cruise ship security and port management.

Arguing that it is more cost-effective to reduce energy consumption than to try to reduce the cost of importing fuel, the bill for an Energy Efficiency Act creates a national registry of refrigerators, freezers, air conditioners and lighting equipment. According to the bill, importers of such equipment are required to submit each product for approval before importing. Persons or companies found to be importing non-compliant goods may have them seized. Annual reports must be filed at the Regulator’s request.

The Law Commission Amendment Bill formally mandates a long-awaited Law Reform Commission, which will conduct periodic reviews to strike old and unnecessary laws from the books. It will also assist with creating a more coherent body of legislation. Importantly, if the bill becomes law, individual departments will no longer be able to unilaterally review and update legislation. They must all work in conjunction with the Law Reform Commission.

The Public Solicitor Amendment bill attempts to address a serious human resource issue in the Public Solicitor’s office. Many of the office staff are recent law school graduates who lack the two years experience mandated by the Law Council. The bill would allow them to sidestep that requirement. This would bring the Public Solicitor’s Office into line with the State Law and Public Prosecutor’s Office.

Taken together, the Water Resource Management bill and the Water Supply bill would create a legislative framework for managing water resources—especially in times of scarcity—and establish minimum safety standards for drinking water as well. This will be of particular interest in the context of recent measures to establish minimum service requirements for property subdivisions.

Lastly, the Oaths acts is to be amended to close a loophole in which MPs elected in a by-election are not required to take an oath of allegiance.

Parliament is scheduled to sit beginning on the 8th of December and ending on the 19th. It is doubtful that the full slate of bills will be voted on in that period. The order in which the bills will be introduced is not known, though it’s common for the debate on the budget bill to begin immediately, as it will certainly take the most time.

Parliament voted on 10 out of 11 bills in the last session of Parliament, all of which passed. The bill for the Commercial Government Business Enterprise Act was withdrawn.

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