Previous Story
‘Fiscal situation is bleak’
|
Posted on Jan 01 2006
The transition report on the Department of Finance will paint a very bleak picture of the central government’s fiscal situation, according to the head of the transition subcommittee that evaluated the agency.
Former Finance secretary and transition committee sub-chair Eloy Inos said that currently, all of the government’s revenues are used for three main purposes—keeping the power service, meeting the government payroll, and ensuring payment to retirees.
“These three issues alone eat up the monthly cash flow coming into this government under the current economic condition. There’s not enough money, if any, to do other things, and that’s a very precarious situation,” Inos said.
He maintained that, while the problem was primarily caused by economic realities beyond the government’s control, the Commonwealth could have adjusted itself to adapt to change.
“The economic situation has changed and we need to cope with that change,” Inos said.
He cited, as an example of this failure to adjust, the government’s inability to enact a budget for three fiscal years now. The FY2003 budget of $213 million, he noted, was no longer realistic in today’s economic setting.
“We now we’re not going to get that. But we authorized the departments to spend on that level. That in itself creates a deficit spending,” Inos said.
Further complicating the problem is the fact that the government was responsible not only for meeting current needs, but also for retiring the deficit acquired in the past.
However, Inos stressed that the government and the citizens alike should be involved in getting the Commonwealth out of its current situation.
“Although the information that will come about from the [transition] report will not paint a rosy picture—in fact it will paint a very bleak picture—we have to move on and look at ways to address the pressing issues. We need to educate our leaders we need to work together. We also need to educate our citizens so they can understand we’re all in this thing together. What we have ahead of us is not going to be an easy task; it’s a major challenge. And it should be a great concern to all of us,” Inos said.
