Kiribati spends close to one in every three dollars of its recurrent budget directly on households, funded largely by fishing licence revenue, Minister for Women, Youth, Sport and Social Affairs Ruth Cross Kwansing said.
Writing on the Devpolicy Blog, run by the Development Policy Centre at the Australian National University, Cross Kwansing said fishing licence fees have brought in more than A$210 million a year in recent years, and the 2027 budget assumes about A$220 million.
That household spending counts social assistance benefits, the copra price subsidy and the annual leave grant, a cash payment made once a year to each worker, long paid to public servants and extended to private-sector employees in 2023. On the International Monetary Fund's measure, she said, that makes Kiribati the largest spender on social assistance in the Pacific relative to the size of its economy.
The Senior Citizens Allowance reaches more than 9,500 elders at a cost of A$22 million, and the Disability Support Allowance supports over 4,000 people at A$2.85 million, she said.
The Support Fund for the Unemployed peaked at A$27 million during the pandemic, when remittances fell and supply chains broke down, and has settled at A$23 million as labour mobility schemes and the annual leave grant drew people into paid work.
The copra subsidy reached about 9 per cent of GDP in 2025 and is budgeted at A$30 million in 2027. It is paid in the outer islands through Kiribati Coconut Development Ltd, alongside sea-freight subsidies of A$600,000, to ease pressure to move to South Tarawa.
Cross Kwansing said the World Bank and the IMF find the copra subsidy does reduce poverty but becomes less effective the larger it grows, and that cash transfers targeted at poor outer-island households would deliver more poverty reduction per dollar. The government is examining what that means, she said, but the decisions remain Kiribati's.
The 2027 Fiscal Strategy caps operational departmental spending at 50 per cent of total recurrent expenditure and keeps liquid cash reserves at no less than three months of government operations.
By mid-2026 cash reserves stood at A$286.8 million, about eight months of expenditure, she said. The 2027 budget projects revenue and expenditure of A$430.5 million with a surplus of A$34,111, and holds grants and subsidies for senior citizens, people with disabilities and the copra sector at A$80.1 million.
The Revenue Equalisation Reserve Fund reached A$1.74 billion by July 2026 and is on course for A$2 billion by the end of 2027, she said. Annual dividend withdrawals have been cut from A$78 million to A$45 million, and drawn funds may be used only for Cabinet-approved initiatives producing social, human or physical infrastructure.
Benefit payments are being centralised under the National Economic Planning Office to cut duplicate claims and check claims against national registries. Tax changes, including the modernised Income Tax Act and a shift of the import VAT benchmark from Free on Board to Cost, Insurance and Freight, are conditions development partners set before releasing budget support, with A$35.4 million anticipated in 2027.
Cross Kwansing is the Pacific Islands Forum Political Champion for Gender Equality and Social Inclusion and represents the Pacific on the United Nations Commission on the Status of Women. The article notes she previously served as In-Country Director for Kindling Kiribati, whose programmes are mentioned in it.