The Ministry of Finance today announced a proposed government budget of $5.3 billion for the 2018/19 fiscal year, on the back of recovering oil prices and forecasted GDP growth of 0.8 per cent.
The allocation sees no increase in spending, with the previous year having the same budget allocation.
Even though Brunei’s economy was projected to shrink by 1.3 per cent in 2017 — marking four years of consecutive downturn — GDP is expected to see a modest recovery in 2018.
Buoyed by the recovery in global oil prices — currently valued at US$65 a barrel — the government collected $3.76 billion in revenue in last year, with 75% derived from the oil and gas sector.
But despite this positive development, the second finance minister urged caution, warning that the sustained slump in the energy market has taken its toll on Brunei.
“Oil prices are volatile and unpredictable, and will have a significant impact on the economy of the country as a whole,” YB Dato Seri Paduka Dr Hj Mohd Amin Liew Abdullah said during the budget readout at the Legislative Council.
The government will still record a budget deficit of $1.54 billion for 2017, he noted, although it has fallen by 40 per cent from its height of $2.6 billion in 2016.
INTERNATIONAL MONETARY FUND (IMF) FORECAST FOR BRUNEI DARUSSALAM:
In his address to parliament, the minister said attracting foreign direct investment; making industries competitive; and developing micro, small and medium businesses (MSMEs) were all crucial to economic diversification.
He outlined the five thrusts of the 2018/19 budget: prudent spending; creating employment opportunities and capacity-building; enhancing productivity through innovation; ease of doing business; and preserving public welfare.
“In the desire to promote the country’s economic growth… focus will continue to be given to fiscal consolidation and fiscal sustainability policies by emphasising cost-effectiveness, pro-business, as well as prudent spending — without affecting the level of service, productivity and finances of the government in the long-term.”
Some of the key budget allocations highlighted by the Minister of Finance II:
Employment and capacity-building
• $43 million to help create employment for youth through the i-Ready scheme and Centre for Capacity Building
• $44 million in government education scholarships
• $80 million for the Education Loan Assistance Scheme
• $15 million to finance the Literacy and Numeracy Training Programme for teachers
Innovation and productivity
• $67 million for information technology infrastructure for all government ministries
• $6 million for research into science, technology and innovation
• $2 million to develop the ‘One Common Billing System’, which allows government agencies to settle payments more efficiently
• $10 million to support rice cultivation
• $30 million to support vegetable farming
• $15 million to support the development of the aquaculture industry
Preserving public welfare
• $78 million for health services and supplies
• $30 million for specialist patient treatment at Pantai Jerudong Specialist Centre dan Gleneagles Jerudong Park Medical Centre
• $21 million to improve public transport
• $11.5 million for flood management
• $7.3 million for cleanliness and beautification of public parks and spaces
The specific budgets for each government ministry will be announced in turn during the two-week parliamentary session.