Download Medium-Term Expenditure Planning

PALAU
Presented By: Darren & Chandler
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Population: 17,501 (2012 Mini Census)
Nominal GDP (FY2014): $249.1million
Annual Budget for FY2016: $84,459,200
Expenditures account for 36% of GDP (FY2014)
Sources of Funds:
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Taxes
Grants
Other Revenue (permits, licenses, fees, etc.)
Compact Funds
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Use of Goods and Services-10% of GDP
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Utilities and Communications
Medical Supplies
Contract Services
Building & Construction
Compensation of Employees-15.3% of GDP
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Wages
Medical Savings Account
Social Security
Pension Plan
Revenue and Expenditures in % of GDP
50.0%
45.0%
40.0%
GDP %
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Revenue
Expenditures
2011
44.3%
35.8%
2012
44.9%
35.8%
2013
41.1%
36.1%
2014
43.6%
35.6%
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Wage Bill
◦ 15.3% of GDP
◦ 38% of FY2014 Budget
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Budget Reserve Fund
◦ $1 million every fiscal year
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Rebuilding after natural disasters
◦ Typhoon Haiyan expenditures: $4.6 million in FY14
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External Debt
◦ 28.3% of GDP
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Subsidy Programs for Low-Income
◦ FY2016: $1.6million for fixed and low income
households for electrical power consumption
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Future Debts
◦ National government assumes debt responsibility if SOE
defaults.
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Infrastructure repairs and maintenance
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Future Development Expenditures
◦ New Correctional Facility (Prison)
◦ Relocation of the national hospital
◦ Relocation of landfill (dumpsite)
 National Development Strategies (NDS):
 guide the overall prioritisation of budgets and resource
allocations
 Medium Term Fiscal Strategies (MTFS):
 identify the overall macroeconomic & related fiscal
policies/strategies & priorities derived from the (NDS) for
resources to be mobilised
 Medium Term Fiscal Framework (MTFF):
 takes the strategies from the MTFS and presents aggregate,
medium-term macroeconomic & fiscal targets (revenue &
expenditure) together with assessments of policy risks &
vulnerabilities to ensure a stable budget position
 Medium Term Budget Framework (MTBF);
 with the MTFF as a starting point the MTBF disaggregates
expenditure to agencies and indicates resource allocations
based on NDS priorities
 Medium Term Expenditure Framework (MTEF);
 agencies take the MTBF resource allocations and allocate
according to sector/agency performance targets
National Medium Term Development Strategies (MTDS)
Macroeconomic policy: GDP, BoP,
income, employment, CPI
Sector Policies & Strategies
Medium Term Fiscal Strategies (MTFS)
Fiscal Policy and Strategies aligned to MTDS
Broad Targets for Fiscal Indicators/Ratios/Benchmarks
Medium Term Fiscal Framework (MTFF)
Forecasts for Revenue & Expenditure based on MTFS & MTDS Macroeconomic
Policy
Medium Term Expenditure Framework (MTEF)
Detailed costing/output item & performance budget allocations
Medium Term Budget Framework (MTBF)
Line Ministry prioritised
programs/projects
Firm Expenditure Ceilings for Line
Ministries
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The economy of Palau has experienced low rates of economic
growth in the last three/four years
affected revenue flows to the government and has weakened
the budget situation;
there is a need to:
◦ Improve economic performance;
◦ Restore budget sustainability;
◦ Ensure better information for policy making and prioritization of
resource allocation for the future
These objectives can be supported by a medium term fiscal
framework and an MTBF
a set of basic economic and fiscal forecasts/targets
derived from a sound fiscal strategy;
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leading to
◦ Better coordination between finance and LMs;
◦ Better budget planning and management by LMs
◦ Sound economic & fiscal management