The Minister for Finance and Treasury, Hon. Snyder Rini has today announced that the Government had agreed on a package of measures to help Solomon Islands manage the impacts of the Global Economic Crisis on the 2009 Budget and the Solomon Islands economy.Minister Rini said it is not only the developed countries that are being hurt by the Global Economic Crisis, as the impact appears to be spreading to developing to countries such as the Solomon Islands. "But the Government is determined to maintain confidence during these challenging times", said Minister Rini.
"The Government has been saying we need to carefully and closely monitor things such as our Budget and the level of our exports to know whether we are managing the Global Economic Crisis appropriately," Minister Rini said.
"In order to be cautious and responsible I have waited until the performance of the first quarter of 2009 Budget to be made available before embarking on firm and workable action. Now that first quarter results are available and I have had my officials analyze these, it is clear there will be some hardships and difficulties for the country which need to be managed very carefully."
Minister Rini said that the Government has developed a strategy for managing the economy, which would help ensure that the Government continues to meet its commitments to delivering services to Solomon Islanders.
To protect the Budget and the economy at a difficult time, when revenues are being cut by slowing exports and lower commodity prices, the Government will:
. manage expenditures by placing a 10 per cent reservation on 2009 Budget reservations;
. prevent payroll expenses from expanding by limiting recruitment to replacing people in previously filled positions. However, recruitment processes that are already underway will be allowed to continue;
. prioritise spending in the Development Budget;
. implement a range of measures to increase Government revenue by new compliance measures and higher duties and excises on alcohol and tobacco;
. pursue Budget reforms to improve spending and transparency and help manage this and future Budget difficulties;
. undertake structural reforms to encourage greater investment and trade in Solomon Islands.
By taking these series of actions the Government has shown it is serious about managing the problems of the economy.
"Despite the pressures and challenges impinging on the 2009 Budget and the government cash position, we are confident to control and manage the finances prudently in order to minimize the impacts of the global economic crisis. We are also prioritizing spending to make essential services the highest priority and ensure these continue to run and operate. Moreover, we are continuing to implement important policies that help to grow our country and implementing the economic reforms that make Solomon Islands an easier and better place to do business and create employment," said Minister Rini.
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