Today, December 12th, 2023, the 9th Constitutional Government presented the Draft Law Proposal (PPL – acronym in Portuguese) for the 2024 General State Budget (GSB) to the National Parliament, focusing on the central theme “Building a bridge for tomorrow: investing in the productive sector and social capital”.
The 2024 General State Budget proposed by the Government presents a consolidated figure of US$ 1.95 billion for the Central Administration, the Special Administrative Region of Oe-Cússe Ambeno (RAEOA) and Social Security, not including the Social Security Reserve Fund. This amount consists of an allocation of US$ 1.83 billion for the Central Administration, US$ 60 million reserved for the RAEOA, and US$ 347.6 million for Social Security.
The Prime Minister, Kay Rala Xanana Gusmão, in his speech at the debate’s opening, stressed that the Government had summarised “in this budget, the strategic objectives of the 9th Constitutional Government’s Programme in two fundamental pillars: the productive sector and social capital”, to contribute “to building a prosperous and sustainable future”.
In this sense, the Government intends to promote “investments in public infrastructure, in production capacity and job creation, and in diversified economic sectors that will contribute to boosting economic growth” and from the “social point of view, investments in education, health, inclusion, combating poverty and protecting the land and maritime environment, in short, investments in sectors with a direct impact on improving the quality of life of the Timorese and with long-term results”.
The Head of Government explained that “to be able to implement the strategic measures to leverage the productive sector and social capital, it is necessary to make a transfer from the Petroleum Fund above the Estimated Sustainable Income”, which will serve “to invest in economic diversification and not to feed the State’s current expenses”. He also argued that “without investment, there is no growth, no economic and social development. Without investment, it is not possible to boost the productive sectors that generate employment, nor to develop healthy and qualified citizens who can contribute to the diversification of the economy, which is so necessary to avoid the depletion of the Petroleum Fund”. “Investments in agriculture, fisheries and livestock, in tourism, small and medium-sized industries and companies and support for private initiative. In other words, in everything that promotes the creation of livelihoods and income for families while strengthening sovereignty and independence by replacing imported goods with domestic production”.
Xanana Gusmão stressed that “the Government is committed to establishing a supply base and refinery on the South Coast, to connect to the Greater Sunrise pipeline, to develop a national oil industry that, among other things, provides employment for the Timorese” because “in a country like ours, young and fragile, where around 60% of our population is under 25 years old, we need to have the courage to invest in projects that transform the economy and consolidate national stability”.
“For the well-being and sustainable development of Timor-Leste’s future”, the Prime Minister ended his speech with an advance acknowledgement of the contributions and requirements of the Members of the National Parliament “so that the ‘bridge’ we are building today for tomorrow may be solid and resilient to the challenges we foresee and the challenges we cannot foresee”.
The National Parliament’s Public Finance Committee (Committee C), in its Report and Opinion on the Draft Law Proposal, states that “making a comparative analysis with the General State Budget approved for 2023, we can conclude that the GSB proposed for 2024 has been reduced by US$ 130,000, or 6.6% in relative terms, largely as a result of a reduction in the Public Transfers category, which represents 44.7% of the General State Budget’s current expenditure. In 2024, expenditure on public transfers will fall by 28.7% compared to the 2023 General State Budget. This reduction is explained by the need to reduce public spending and increase state efficiency”.
The Report also states that “if we compare the 2023 GSB with the 2024 GSB Draft Law Proposal, regarding functional classification, we can conclude that most of the increase in the budget is concentrated in social protection, which goes from US$ 208 million to US$ 467 million, an increase of 124.6%. This increase is explained by the need to meet the population’s needs, which is facing an increase in the cost of living and poverty. Other areas that saw significant increases were economic affairs (45.3%), housing and collective infrastructure (49.3%) and health (13.6%)”. “According to the Strategic Development Plan (SDP) classification, the Social Capital sector leads with 31.9%, showing the Government’s commitment to prioritising investments in social assistance, education and health. Following closely behind, the Institutional Framework sector receives 29.6%, highlighting the emphasis on consolidating the Government’s structures and institutions”. “In the 2024 General State Budget, the Infrastructure Development sector is allocated an expressive 27.8%, indicating a substantial investment in building and improving essential physical structures. Lastly, the Economic Development sector receives an allocation of 10.7%, revealing a concentrated effort to boost economic growth and development initiatives”.
The Draft Law Proposal for the 2024 General State Budget will be debated in general terms until tomorrow, December 13th. The specialised discussion and vote, with a detailed analysis of each article of the Government’s Proposal, begins the following day and must be concluded by December 20th, with the final overall vote. This will be followed by the final drafting of the Law by Committee C to be sent to the President of the Republic on December 22nd, 2023.