BELIZE CITY, Wed. Feb. 3, 2016–There is a lot of curiosity over what the 2016 budget will look like, as the new financial year begins to appear on the horizon. The national budget now exceeds a billion dollars, with the bulk of the funds going towards recurrent spending such as salaries.
Of note is that the new budget for 2016-2017—originally forecasted at BZ$1.04 billion, a shade smaller than the $1.07 billion approved last year for 2015-2016—should include the third and final tier of salary adjustments the Government promised to teachers and public officers. In 2014, teachers and public officers got a 6% raise and last year, they received another 8%. The third adjustment will be worked out after the budget year ends on March 31, when the Government will know how much, if any, excess revenue it earned that it can split with workers, under a 50-50 arrangement.
In the days ahead, the Ministry of Finance will accelerate work to put together the budget. It is currently awaiting final submissions from the various government ministries, which it hopes to receive by the end of the week.
After the budget submissions are all in, the national budget will be compiled by program areas, in a multi-year, budget table which will project from 2016 to 2019.
The budget for the 2015/2016 year had a financing gap of $174 million, and the budget approved by Parliament in 2015 projected a financing gap of $110 million for the upcoming fiscal year. That figure may be adjusted in the new budget.
We understand that the plan is for the budget to be tabled in Parliament in early March, after submission to Cabinet. After introduction of the budget in the House of Representatives, the budget debate will ensue within two weeks, after which it will be passed up to the Senate for approval.
The new financial year starts April 1, and it is expected that teachers and public officers will get their final adjustment in July, after the unions and the government officials in the Ministry of Finance review the numbers and arrive at an agreement.
Apart for salaries, debt servicing takes another huge chunk out of the budget. Of note is that Superbond payments, which now amount to $100 million a year, will be larger, with the interest rate increasing from 5% to 6.7% next year.
Our Ministry of Finance source said that the increase in fuel taxes implemented at the end of 2015 should help to bridge the gap between revenues and expenditure. So far, there are no indications to date that the new budget will come with new taxes or further tax increases, our source said.