General InterestGovernmentLao Economy

Spending Cuts Mulled To Minimise Budgetary Tensions

Source: Vientiane Times

The government is contemplating a cut in budget expenditure to maintain financial liquidity following a revenue shortfall during the past four months of this year.

Measures to reduce spending could be imposed, particularly in sectors and areas which expect to see a revenue deficit by the end of this year.

The cabinet’s monthly meeting, chaired by Prime Minister Thongloun Sisoulith last week, highlighted the need to use the national budget effectively and efficiently, ensuring transparency and accountability in financial transactions.

The government also announced it would scrutinise duplicated and unauthorised spending that contravened financial principles and laws.

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The regular inspections will help limit and prevent financial leaks and unauthorised spending of the national budget.

During the National Assembly’s session held in Vientiane last month, lawmakers were told about how officials cheated the State budget.

For instance, officials made a seven-day plan to travel to a province, but they actually went there for only three or four days. Worse, some offices made plans for a project but when they got the budget from the government, they spent the funds on other projects.

Despite financial difficulties, the government has reaffirmed it will prioritise spending on officials’ salaries and allowances and on repaying the nation’s debt.

Expanding the payment of officials’ salaries through the banking system is also essential so that all State employees can receive their wages in a timely manner.

The exact number of State employees must be monitored regularly to ensure proper payment to these officials.

Money in the treasury system cannot be used for making prior payments to individuals and companies that make deals with the government.

Stronger measures will be put in place to address problems related to overvalued State investment projects. The move will ensure the quality of projects and the effective and transparent disbursement of the State budget.

On May 19 last year, Prime Minister Thongloun issued Order No 09 aimed at ensuring the effective use of the State budget in pursuit of a national frugality policy.

Some of the most important features of the order are an official ban on the construction of public office buildings from now until 2020, and the prohibition of purchases of new vehicles for State administrative affairs for 2018.

Cabinet members at the government’s monthly meeting said it is critical to further implement the PM’s Order and carry out thorough research and studies on how to repay debts for State investment projects that would allow private companies to grow their businesses.

According to the Ministry of Finance, the target for revenue collection in 2018 is 25,452 billion kip, while expenditure has been set at 32.8 trillion kip.

From January to April this year, the income from revenues across Laos amounted to 7,291.2 billion kip, equal to 28.6 percent of the figure targeted for the whole of 2018.