Govt must cut spending,

GOVERNMENT departments will need rein in spending and generate more revenue to fill an 83-million-TL hole in this year’s budget, Finance Minister Serdar Denktaş has warned.

Democrat Party (DP) leader Mr Denktaş said that “unsustainable” overtime payments to thousands of civil servants and other public sector workers — amounting to 120 million TL last year, up from 89 million TL in 2016 — had been the main cause of the deficit.

He made the comments during a debate in Parliament, one of the first in a series to approve total state spending this year of around 5.73 billion TL.

The debates had to be delayed by three months due to January’s general election.

Mr Denktaş said “fiscal discipline” shown by the previous National Unity Party (UBP)-DP coalition government had resulted in “considerable success” last year, when a surplus of 78.5 million TL was recorded.

Mr Denktaş also reeled off a set of figures showing that the TRNC’s budget deficit had been 45.4 million TL in 2013, 32.4 million TL in 2014, 104.1 million TL in 2015, and 20.8 million TL in 2016.

“The biggest challenge we face is the mismatch between the government’s revenues and spending,” he said.

“Public spending is greater than revenues, which has resulted in more borrowing and delays in terms of the payments.”

Mr Denktaş listed a series of measures that he said would be needed to balance the books in the long term, such as the “continuation of fiscal discipline”, “better public sector efficiency” and the creation of more jobs in the private sector.

He said that under the 2018 draft Finance Bill, the 83 million TL shortfall would have to be covered from “domestic financial resources”.

Figures for money allocated to individual government departments were also revealed during the debate. Mr Denktaş’s Finance Ministry is the biggest recipient of cash, set to receive roughly 2.5 billion TL.

That is followed by the National Education and Culture Ministry (733.7 million TL), the Health Ministry (423.1 million TL) and the Agriculture and Natural Resources Ministry on 289.5 million TL.

The Prime Minister’s office will receive 139.2 million TL, followed by 68.4 million TL for the combined Deputy Prime Ministry and Foreign Ministry.

Some 33.4 million TL has been allocated to the Presidency and 28.7 million TL for Parliament.