SOLOMON ISLANDS GOVERNMENT DEFICIT SOL$44 MILLION IN SIX MONTHS

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HONIARA, Solomon Islands (July 31, 2002 - SIBC/PINA Nius Online)---The Solomon Islands Government recorded a deficit of Sol$ 43.8 million (US$ 6,162,660) for the first six months of this year, according to documents seen by SIBC News.

The documents reveal that the government failed to get its payroll under control and overspent Sol$28 million (US$ 3,939,600) on salaries and wages alone.

They also revealed that the financing of the deficit for the current year has come mainly from grant aid from Taiwan. But the accumulation of debt continues, as the government has failed to meet its bills as they are due.

The government documents, however, state that the deficit for the second half of the year may not be as large. This is because revenue in the second half is normally higher than the first half, they say.

In other developments amid the deepening Solomons economic crisis following more than two years of ethnic conflict and continuing law and order problems:

***Two ministries and a government department were alleged to be operating "illegal" bank accounts at commercial banks.

Opposition spokesperson on National Development Fred Fono said the Mines and Energy and Foreign Affairs ministries and Civil Aviation Department are operating accounts outside normal procedures.

Mr. Fono said Mines and Energy receives money from the two fuel depots in Honiara and other fees.

Foreign Affairs receives money from the multilateral fishing agreement with the United States through the Forum Fisheries Agency.

Mr. Fono said this money is supposed to go into the consolidated fund, so the government can pay for services, salaries and other bills.

* The Public Sector Employees Redundancy Task Team said it recognizes the concerns of the Public Employees Union over the planned redundancy of 1,300 public servants.

It said the redundancy plan will not only affect government ministries, but also includes a re-look at economically troubled public enterprises.

These include Solomon Airlines, Solomon Islands Postal Corporation, Solomon Islands Electricity Authority and a restructure of the Commodities Export Marketing Authority.

It said it is now finalizing a report that includes downgrading of senior posts, withdrawal of non-essential functions, elimination of improper allowances and eventual reform of the government machinery.

A report of a government "Think Tank Team," which was earlier submitted to the Cabinet, suggested as an alternative to redundancies there be:

an across the board payroll reduction of 40 percent, and

a three-day week for all public servants, including essential services.

For additional reports from the Solomon Islands Broadcasting Corporation, go to PACIFIC ISLANDS REPORT News/Information Links: Radio/TV News/Solomon Islands Broadcasting Corporation.

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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