The National Parliament approved today, April 23rd, 2021, the first amendment to Law no. 14/2020, of December 29th, on the 2021 State General Budget, with 44 votes in favour, 20 abstentions and no votes against.
Given the evolution of the COVID-19 pandemic, it is necessary to increase the capacity to prevent and combat the pandemic, as well as to adopt measures to mitigate its economic impact. Therefore, with this amendment, the COVID-19 Fund will be reinforced to finance a set of six main intervention measures, prepared by the Government, which are: 1) employment support; 2) credit moratorium; 3) student support; 4) food security; 5) support for frontline professionals; and 6) prevention and mitigation of COVID-19.
Necessary changes have also been made in this Budget by strengthening the Contingency Reserve Fund, in order to meet the challenges caused by the flooding last April 4th, 2021.
This change does not imply an increase in the amount of transfer from the Petroleum Fund to the General State Budget. The increase in revenue to finance the expected increase in expenditure stems from the inclusion of balances of management determined at the end of the budget year 2020, but not included in the State Budget for 2021, as well as the reallocation of budget appropriations between titles from the appropriations for All Government and the Infrastructure Fund.
Prime Minister, Taur Matan Ruak, in presenting the Law Proposal Draft stated that the Government intends to take “immediate and forceful measures to stabilise the economy, protect the health of our People and rebuild our infrastructure.”
Thus, in the economic sphere, employment support and credit moratorium measures have been designed with the aim of maintaining jobs and increasing the liquidity of companies.
“These measures protect the jobs of thousands of existing workers and many others in the informal sector not covered by the previous wage subsidy scheme. They also improve targeting to distribute more to those who need it most, allowing for additional benefits. New and greater incentives for job retention and subsidies are developed. Finally, an unemployment benefit is established and the social safety net is expanded, increasing in-kind transfers to meet the needs of the most vulnerable.”
“Measures to support the private sector and companies and individuals indebted to the financial system, including a Credit Moratorium of up to 9 months for loans granted until 1 April 2021 were also developed”.
“Government will continue to support households facing significant food security challenges by providing and distributing food and other items considered essential through the Basic Basket Programme and by purchasing food reserves through the National Logistics Centre.”
“Finally, the Government will also support higher education students with tuition fee exemption and provision of free internet, benefiting between 18,000 and 35,000 students.”
“The Government will continue to strengthen its health response to COVID-19″, with a priority to “ensure access to COVID-19 tests and vaccines for all”. It will also keep “our heroic frontline workers safe, with more personal protective equipment” and strengthen “our health system, with improved hospital and inpatient care, and additional isolation and quarantine capacity.”
In his last intervention, at the end of the detailed discussion, the Prime Minister thanked, on behalf of the VIII Government, the members of the National Parliament for acceding to the Government’s request to analyse this proposal as a matter of urgency and also for the contribution of all during the discussion of the Law Proposal. The Head of Government also appealed “to the population to remain united” and stated that “only united we can win this fight”.