The proposed budget for
financial year 2021-2022 is estimated to be BND5.86 billion, similar to
the previous financial year (2019-2020). The government revenue for
financial year 2021-2022 is projected to be BND2.61 billion and the
nation will record a budget deficit of BND3.25 billion.
This was highlighted by
Minister at the Prime Minister’s Office and Minister of Finance and
Economy II Yang Berhormat Dato Seri Setia Dr Awang Haji Mohd Amin Liew
bin Abdullah when deliberating the proposed budget for financial year
2021-2022 at the third day of the 17th Legislative Council
(LegCo) session yesterday. The government revenue for financial year
2021-2022 is projected to be BND2.61 billion whereby revenue from oil
and gas sector is projected to be BND1.52 billion and for non-oil and
gas sector is BND1.09 billion.
The minister said the country’s revenue is
still largely dependent on the oil and gas sector. The COVID-19 pandemic
has affected world oil demand causing oversupply, and in turn affected
world oil prices as happened in 2020 where at one point oil prices fell
below USD20 per barrel.
Yang Berhormat Dato Seri Setia Dr Awang
Haji Mohd Amin Liew said, at the same time, the country’s hydrocarbon
production has also declined. These factors have affected the collection
of government revenue to cover government expenditure.
In elaborating on the
breakdown of the proposed budget allocation amounting to BND5.86 billion
for 2021-2022, the minister said for staff salaries, BND2.02 billion is
allocated (equivalent to 34.4 per cent of the total allocation) to
finance salaries, allowances and payment of contributions for 65,281
Meanwhile, BND2.18 billion
(equivalent to 37.3 per cent of the total allocation provided) is
allocated for recurrence expenditure. Development Expenditure is
allocated BND600 million (10.2 per cent), while the rest is to finance
expenses under the heading of Acknowledged Expenses.
As for the government’s fiscal position for
the financial year 2019-2020, the minister said the government’s
revenue collection decreased by 19.6 per cent to BND4.85 billion,
compared to the financial year 2018-2019. The government’s actual
expenditure decreased by 2.1 per cent to BND5.87 billion compared to the
financial year 2018-2019. As such, the government has recorded a
deficit of BND1.03 billion for the financial year 2019-2020.
For the financial year
2020-2021, as for the government’s fiscal position up to February 28,
2021, government revenue collection was BND1.46 billion, a decrease of
57.7 per cent compared to BND3.45 billion for the same period in
financial year 2019-2020.
This was due to the fall in
world oil prices and the decline in crude oil and liquefied natural gas
(LNG) production, which in turn affected the decline in revenue by 69.9
per cent from the oil and gas sector. In addition, revenue from the
non-oil and gas sector has also decreased by 6.6 per cent compared to
the financial year 2019-2020.
Meanwhile, the government’s expenditure up
to February 28, 2021 amounted to BND4.44 billion, which is 75.7 per cent
of the allocation approved for the financial year 2020-2021. As such,
the government’s fiscal position for the financial year 2020-2021 up to
February 28, 2021 has recorded a deficit of BND2.98 billion.
Courtesy of Borneo Bulletin