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Headlines

Solomon Islands

Chaotic finances

The new Solomon Islands government says it has inherited a state of government finances that is “chaotic and appalling”.

Finance minister Andrew Non issued a statement in July saying financial reporting within government had gone worse and control and management was in complete disarray.

Nori says the treasury is empty and the government is operating in a hand-to-mouth existence ...paying its bills as it receives revenue. He says as of mid-year, when the new government took over, the government owed about US$BB million to overseas lenders and US$77 million from domestic sources.

Nori says most of this domestic debt was borrowed by the previous government, He claims this debt has been increasing this year by about US$l.7 million a month. Nori says the Mamaloni government has also piled debts and unpaid bills both at home and overseas amounting to US$6.6 million. He claims it also borrowed US$lO million up to the middle of June from local banks, the national provident fund and the public.

Nori says the new coalition government is determined to restore a sound basis for public finance as quickly as possible.

But he adds in view of the magnitude of the problem this will take some time. Meanwhile he says the government must collect revenue due to it, pay its debts and stop all unnecessary expenditures. To this effect the government has cancelled a US$4 million project to build a new state house. The project was initiated by the country’s previous government, after it sold [he old state house to an Asian company for a hotel

development.

A design for the new state house, which was intended to iccommodate the Governor General, had already been ipproved and the Japanese Kitano Construction company vhich won a contract has already started work on it. But the lew government says it can’t justify spending so much axpayers money on a residence to house just one family, and t says if the construction did go ahead it could cost as much is $7 million.

The cancellation of the house project was one of 15 priorities mnounced by the government when it came to power. ***

-og export

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he Solomon Islands Central Bank says the recent High Court Liling, that the bank does not have the power under the xchange Control Regulations to stop export of goods, does not i any way affect the new price monitoring system for export f round logs which came into effect on July 1.

At that time the bank and government authorities took rgent action to prevent the export of log shipment for which le declared prices were considered by the government to be elow prices in the open market.

Recently a vessel was stopped from sailing by the Customs id Excise Division on advise from the Central Bank that the g export was in contravention of the Exchange Control egulation. The shipment was allowed to proceed when the [porters made a substantial deposit with the High Court.