Tue. Nov 12th, 2019

OEK sends $97-M budget to President, $4.7-M increase over President’s proposed budget

Palau President Tommy Remengesau, Jr. told the media that Palau shares the sentiment of other Pacific nations that Australia as “a big brother, can do more than what they are currently doing.”

With 2 ½ weeks left of FY 2019 fiscal year, President Remengesau Jr. announced on Wednesday that he had just received the FY 2020 Unified Budget from Olbiil era Kelulau.

In his statement to the press, Remengesau expressed that it will take them couple of days to review the budget before taking further action, noting the limited days remaining in the fiscal year.

“We have not reviewed it in depth yet but I note that they have stayed within the Funds Availability Analysis report,” stated Remengesau.  Adding that they have also kept to a standing policy of this administration of helping Palau citizens with cost of living increases such as retirees by passing the $50 additional benefit to each Social Security recipient and passing subsidies for PPUC to ensure no increase in the cost of utilities.

The budget bill that passed by both houses of OEK increased President Remengesau’s proposal by nearly $4.7 million dollars.

The additional increase include $2.1 million subsidy to PPUC, $2.7 million to Pension Plan, $800K to State governments block grants, $250K for Pacific Festival of Arts, $1 million for a vessel for Marine Transportation, $135K for COFA Trust Board and $480K for 5 States capital improvement projects.

There were no public hearings held on the budget bill and no performance budget reports from the States but according to Delegate Jonathan Isechal, Chairman of House Ways & Means Committee, the $50,000 increase to the States’ block grant was to help mitigate increased costs to the States due to recent increases in minimum wage, Social Security contributions, and other costs.

Over $6 million dollars is appropriated to subsidize public enterprises.  $2.1 million subsidy goes to PPUC.  This includes $500K to cover Automatic Fuel Price Adjustment Clause (AFPAC) to “help reduce the impact of the increased fuel cost”  and $1.6 million to subsidize PPUC’s power, water and wastewater operations.

$2.1 million to Social Security was in the President’s version of budget and will pay for the additional $50 dollar increase in monthly benefits for retirees.

OEK added $2.7 million to cover short-fall of Pension Plan which is paying out more in benefits than it is receiving from contributions on an annual basis.

The OEK budget version also have policy changes including amending Chapter 12, Title 40 of Palau National Code to allow for deduction of up to $5,000 of non-citizen resident worker salary from gross revenue before taxes.

The bill also amended 40 PNC Chapter 6 to allow former Presidents stipend to continue beyond eight years after their service.  Former presidents employed by national or state governments or elected to public offices will not be eligible for stipend while in these positions.