GOV’T TO SEEK CONCESSIONAL DEBT FOR TINA HYDRO & UNDERSEA CABLE

The Government will seek concessional debt financing to implement the Tina Hydro and the Undersea Internet cable projects in 2017, while, at the same time restrain the increase in payroll cost for public servants.

A Government statement said these are elements of a series of measures outlined by the Minister of Finance and Treasury Hon. Snyder Rini when launching the 2017 budget preparation process in Honiara on Monday.

The Tina River Hydro Project and the Undersea Internet Cable are expected to boost the local economy immediately and in the medium to long term.

The Undersea Internet Cable would have a less immediate impact during construction, but the World Bank estimates that in the first five years of operation it will boost economic growth by 1 percent in each year when it becomes operational by the end of 2017.

Mr. Rini said for such large investment projects that stimulate businesses and bring sustained economic growth opportunities into the future, the Government will seek concessional debt financing to implement them.

Meanwhile, as part of its cost-saving measures, the Ministry of Finance will work closely with the Ministry of Public Service to control the increasing payroll cost for public servants in 2017.

The payroll has been growing at more than 10 percent for the past six years and the Minister has highlighted, the payroll budget including COLA will be capped at over $1 billion in 2017.

Under this measure, more efforts will be instituted in remuneration and payroll reforms, and there will be a general freeze on recruitment until the reforms are implemented.

The statement said any special case of recruitment must be approved by Cabinet before the recipient ministry commences the recruitment process adding, over time will come under stringent measures.

The measures are expected to make significant savings by reducing the payroll below $1 billion in 2017, and create a permanent and lasting structural adjustment to budget settings.