Little changed in revised Union budget bill
Amendments to the 2016-17 Union budget submitted to parliament this week did little to change spending priorities set out by the previous government, despite calls for reform and a ministerial restructuring.
WHILE the new government has complained their hands are tied with spending patterns set by the previous administration, the chances of a major budgetary overhaul were all but eclipsed by the submission of the amended appropriations bill this week.
The revised Union budget for 2016-17 was submitted to the Pyidaungsu Hluttaw on July 25 with minimal alterations.
Under the newer version, the biggest shift is the accommodation of the government’s decision to reduce the number of ministries from 33 to 21. But according to U Kyaw Win, Union minister for planning and finance, the reduction only saves 2 percent of the K23.6 trillion (US$20 billion) budget.
The savings are now slated to fund the two new ministries – the Ministry of Ethnic Affairs and the Ministry of the State Counsellor. The budget deficit will dip slightly, to K3.76 trillion from the previous estimate of K3.9 trillion.
The 2016 budget was approved in January by a parliament thendominated by the outgoing Union Solidarity and Development Party. While the incoming parliament, with its overwhelming National League for Democracy majority, refrained from amending the budget in the last parliament, the Speaker had said budgetary amendment would be prioritised in the current session, which opened on July 25.
Last April, former Speaker Thura U Shwe Mann recommended wideranging amendments to several laws, including the budget law which, he said, had been adopted “in haste”, with few reductions being applied to initial budget estimates. For instance, the defence ministry’s request for K1.24479 trillion sailed through unscathed. The former Speaker was acting in his capacity as the chair of the Commission for the Assessment of Legal Affairs and Special Issues set up by the incoming government to propose changes to laws passed by its predecessor.
U Bo Gyi, a member of the Public Accounts Committee, told The Myanmar Times on July 25 that 17 teams had been set up to review ministerial budgets, while other members suggested that ministries’ borrowing might be reduced.
Accounts committee member Sai Thiha Kyaw said there would in fact be little change. “The law cannot be changed much. The amendments relate mainly to reflecting the reduction in the number of ministers [from 36 to 18], so that the names of the ministries will be changed, as well as the lending restrictions. Nothing much else is changed.”
Amendments proposed by the 17 teams will be submitted to the Public Accounts Committee on August 2. After about a week to consider the changes, the committee will refer them to the Pyidaungsu Hluttaw, said U Bo Gyi.
Despite a pledge made by President U Htin Kyaw last month to increase public spending on education, health and social security starting this fiscal year with revisions to the budget, significant changes appear unlikely.
U Kyaw Win said tax revenues from the Ministry of Commerce and the Ministry of Hotels and Tourism are forecast to increase by K762 million and K225 million respectively. Further, a 5pc commercial tax on mobile phones collected by the Internal Revenue Department is expected to generate K7.5 billion. The extra tax income has been slated for use in the perennially underfunded education sector. But the modicum of an increase falls far short of the seismic shift needed to achieve the NLD’s ambitious plan to provide universal, free education and an expansion of teacher training programs.
“The 5pc tax on mobile phones has been set to use in sectors which will benefit the public in a direct way. First of all, we will use them in the education sector,” U Kyaw Win said.
There were no changes to a request from the Ministry of Home Affairs to boost security through building fences on the borders with India and Bangladesh. The projects are slated to cost K1.061 billion and K432 billion respectively.
The amendment does alter how much the Myanmar Central Bank can lend. In the original law, the loans cannot be “more than K4.5 trillion”, but under the amended law the amount is now “not more than K5 trillion”.
“We have to amend the total amount of money the Central Bank can lend to conform with the current situation because the Pyidaungsu Hluttaw has already approved that the Union government will borrow K500 billion from the Central Bank as an agricultural loan,” U Kyaw Win said.
Pyithu Hluttaw MP U Ba Shein (Arakan National Party, Kyaukphyu) said he had anticipated larger changes to the budget, and a more contentious debate. “When I heard that the budget law will be amended I was curious. In reality, what they have altered is not unusual. The amendments are just to accommodate reducing the number of ministries,” he said.
Other MPs suggested that the amendments to the budget are not so drastic and not hotly debated because most of the MPs do not have experience setting budgets.
Parliamentarians still have time to make a last-minute shift before submitting reports to the Pyidaungsu Hluttaw’s Public Account Joint Committee, which will report back to the hluttaw after collecting all input.