18 Nov 2010

Vanuatu public services won't suffer despite revenue shortfall of almost US$22m

7:36 pm on 18 November 2010

The Minister of Finance in Vanuatu says funding to government ministries will stay the same despite a cut in next year's budget by almost 22 million US dollars.

Sela Molisa says the budget was also decreased when the economy was bad in the 1980s and 90s but a reduction wasn't expected this year with economic growth of almost four per cent.

He says changes made last year to taxes on beer, wines, spirits and tobacco in line with the Kyoto Protocol resulted in less money coming through the main revenue streams of value-added tax, import duties and excise tax.

Mr Molisa also says hosting the Forum and celebrating Vanuatu's 30th independence anniversary were big costs that won't have to be shouldered next year.

"As far as ministries and departments and government agencies they'll still get more or less the same amount of money for 2011. I mean we're not sacking people from the public service."

Sela Molisa says he'd expected to make a surplus this year but that's not likely to eventuate by the end of December after all taxes are collected.