Ousted Prime Minister Laisenia Qarase has alleged that the finding of the Public Accounts Committee is another attempt to discredit the SDL led government.
Speaking to Fijivillage news this afternoon, Qarase disputes the findings of the Accounts Committee that the SDL borrowed over $775 million in 2006 to finance the gross deficit. Qarase said the members of the Accounts Committee don't know what they are doing.
"I think the figures they are giving are quite misleading," Qarase said. "I don’t think we borrowed $700million in 2006. If we did then the budget would have been over $2b. I remember that budget was only $1.7b so if you add $700m to the actual expenditure budget in 2006 it would exceed $2b.
"There must be something wrong with their figures. Now I want to say that the borrowing was not excessive, it was used wisely," he said.
"It was used in Capital Expenditure Programmes so again it reflects the lack of ability and lack of commonsense amongst the members of the Public Accounts Committee – they simply do not know what they’re talking about."
According to Qarase all governments have to borrow to stimulate economic growth which is lacking under the interim government.
"We did tell the public that we were going to spend a lot of money to stimulate the country and make it grow. And that’s exactly what happened," Qarase said.
"At the end of 2006 we achieved quite good economic growth and there was a lot of activity in the economy – everybody was getting prosperous. So if we had decided not to spend money then of course we would not have achieved that. Now you compare that with what is happening now by the interim government.
"They are hardly spending anything so we have a pathetic state of affairs on our roads, our water supply problems continue, there are no rural developments and so on and there are a lot of problems with our health services and education services.
"That is the outcome of spending far less money – so you have to balance it out."
After assessing the 2005 and 2006 Auditor General reports, the Public Accounts Committee said the high level of borrowing practiced by the SDL government in 2005 and 2006 needs to be reduced urgently as the country's deficit budget would just grow based on those trends.
Reduce Borrowing Practice
The high level of borrowing practiced by the Soqosoqo Duavata Ni Lewenivanua (SDL) government in 2005 and 2006 needs to be reduced urgently as the country's deficit budget would just grow based on those trends.
The Public Accounts Committee said action should be taken now for the government to reduce its dependency on borrowed money and strategize development programmes to generate revenue and also strengthen revenue collection measures.
Spokesperson for the Accounts Committee Taufa Vakatale said in 2006, for instance, the committee is gravely concerned that both overseas and domestic loans totaling $633,885,000 was taken by the then government to finance the gross deficit which was $285.7M.
She said this borrowing was way above the deficit amount.
“In our enquiry we found that they were borrowing from overseas and they had enough money to cover the defecit," Vakatale said.
"In addition to that they continued to borrow from the bank. Treasury bills, an interim measure. The Treasury Bills went up to, I think, $131 a fantastic sum like that, which then for us when we worked out the percentages , and we found that it was far beyond the operating budget that they needed. And it really was excessive borrowing.”
The Public Accounts Committee raised concern on the continued reliance of the SDL led government on loans in 2005 and 2006 to meet its day to day operations.
It revealed that in spite of the excessive amount borrowed, Treasury Bills were also raised for the amount of $141,311,000 bringing the total loans raised in the year 2006 to $775,195,000.
However, the committee said 51% of the borrowed amount covered the budget deficit and 49% were simply excessive borrowings.
"Government was not pro-active enough or aggressive enough in collecting revenue," she said.
"We strongly recommend that government should strengthen its revenue collection with some urgency and reduce its dependency on large volumes of quick-fix money.
"We go out to the reserve bank and get the treasury bills. The committee recommended that the office of the auditor general and the Reserve Bank resolve the issue of conflicting interpretation of payment of overnight borrowing – this is on Treasury Bills – so that the Ministry of Finance could strictly adhere to the ground-rules of repayment day after borrowing.
"Because with Treasury Bills – overnight borrowing is supposed to mean we pay the next day but we found that this wasn’t so.”
SDL Govt Loans Excessive
The Public Accounts Committee today raised concern on the continued reliance of the Soqosoqo Duavata Ni Lewenivanua (SDL) led government on loans in 2005 and 2006 to meet its day to day operations.
As the committee released its first finding after assessing the 2005 and 2006 Auditor General reports, the committee said in 2006, for instance, they are gravely concerned that both overseas and domestic loans totaling $633,885,000 was taken by the then government to finance the gross deficit which was $285.7M.
The Public Accounts Committee revealed that in spite of the excessive amount borrowed, Treasury Bills were also raised for the amount of $141,311,000 bringing the total loans raised in the year 2006 to $775,195,000.
However, the committee said 51% of the borrowed amount covered the budget deficit and 49% were simply excessive borrowings.
It also found that unpresented cheques continued to be an issue of concern, as the number increased with a value from $51,889,000 in 2005 to $60,401,000 in 2006, which is an increase of 18%.
The committee headed by Manu Korovulavula was given 66 pending audited reports to review and examine.
It said it has concentrated its efforts on the 2005 reports and thereafter as the rest would merely be historical.
