BANDAR SERI BEGAWAN – The government has tabled a supply bill of $5.96 billion for the 2023/2024 financial year, seizing on the momentum of high energy prices to spur post-COVID recovery.
Introducing the bill at the Legislative Council on Monday, the Second Minister of Finance and Economy Dato Dr Hj Mohd Amin Liew Abdullah said government revenue had grown by approximately 25% in the past year, with an estimated $6 billion in earnings for FY 2022/23.
The government is set to close the financial year on March 31 with a marginal surplus of $100 million (equivalent to 0.5% of GDP), the first budget surplus in four years.
Energy prices have surged since the Russia-Ukraine war broke out — oil prices were 40% higher in 2022 while gas prices doubled.
Although analysts predict oil prices will remain elevated in 2023, averaging around US$83/barrel, the government has made a conservative projection of just $2.99 billion for state revenue in the upcoming year.
The minister said the government is expected to register a deficit of $2.97 billion in FY 2023/24, although the final figure would be dependent on a number of factors — domestic oil and gas production, global energy prices, strength of the US dollar, and growth of Brunei’s downstream sector.
Brunei’s economic recovery may be tempered by weak global outlook
The reopening of international borders and robust growth in the downstream oil and gas sector is set to spur economic recovery.
As of 2021, crude oil and LNG no longer dominate the sultanate’s exports, their total share falling from 90% in 2018 to 39% in 2022.
Petroleum and chemical products made by downstream companies such as Hengyi Industries, Brunei Methanol and Brunei Fertilizer Industries now account for the bulk of exports.
However, Dato Dr Hj Mohd Amin said growth projections may be tempered by a number of factors: disruption to domestic energy production, high inflation, ongoing geopolitical pressures that could cause supply chain disruptions, and the risk of a global economic recession.
‘Building a Prosperous Future Together’
Themed “Building a Prosperous Future Together”, the 2023/24 budget will focus on three key areas — preserving public welfare; supporting inclusive and sustainable national recovery; and development of dynamic, proactive and innovative human capital.
From a proposed allocation of $5.96 billion, $500 million would go towards development spending, $2.19 billion for staff salaries and $2.21 billion to recurring expenses. The balance of $1.06 billion will go towards the government’s charged expenditure.
Here are some of the key allocations highlighted in the budget readout:
Focus 1: Preserving public welfare
• $11.3 million for the integrated road system (from a total planning cost of $926.7 million under the 11th National Development Plan, known as “RKN 11”).
• $34.8 million to improve clean water supply (from a total planning cost of $234.4 million under RKN 11).
• $69.2 million to strengthen and stabilise electricity supply (from a total planning cost of $335.7 million under RKN 11).
• $65.1 million for public housing scheme (from a total planning cost of $195 million under RKN 11).
• $105 million for the implementation of the new National Retirement Scheme, known as “SPK”.
• $12.6 million for monthly welfare assistance for people with disabilities
• $51 million investment into the establishment of the Digital Intelligence Hub under the Epidemic Intelligence and Response Unit.
• $51 million for infectious disease control.
• $55 million for medicines; $45 million for medical supplies and services; $3 million for health infrastructure.
• $700,000 for the ASEAN Climate Change Centre (from a total planning cost of $2.1 million)
• $25 million for management of natural disasters, and an additional $596,000 to mitigate the risks of natural disasters
Focus 2: Supporting inclusive and sustainable national recovery
• $6.3 million for projects under the Temburong District Development Authority.
• $500,000 to subsidise the cost of fertilisers and machinery for farmers.
• $9.3 million for the rice buy-back scheme and purchase of hybrid seeds
• $6 million for commercial rice cultivation in Kandol, Belait (from a total planning cost of $36 million under RKN 11).
• $4.5 million for livestock industry development (from a total planning cost of $26 million under RKN 11).
• $118,000 for aquaculture site development (from a total planning cost of $15 million under RKN 11).
• $1.9 million for Government Data Centre and Cloud Infrastructure (from a total planning cost of $15 million under RKN 11).
• $2 million for National Education Management System, which includes a centralised admission system and database for all higher education institutions.
• $18 million for development of BruHealth phase II and III.
• $3.4 million for support and maintenance of BruHIMS Level 1, 2 and 3; and $500,000 (from a total planning cost of $50 million under RKN 11) to expand BruHIMS features to introduce the Intelligent Electronic Medical Record system, Intelligent Care Plan and Clinical Pathway Recommendation.
• $127.8 million for strengthening government ICT infrastructure.
• $148,000 for the MOD Integrated Platform, which includes preparation of new Land Registration System.
• $406,000 for National Registration System and Biometric Border Control System (from a total planning cost of $12.3 million).
• $41.3 million to develop skills capacity at government ministries.
Focus 3: Development of dynamic, proactive and innovative human capital
• $19.8 million to build infrastructure at schools and tertiary institutions (from a total planning cost of $195.4 million under RKN 11), including the new UNISSA campus in Temburong and a permanent campus for Politeknik Brunei at Ikas Bandung.
• $42.8 million for overseas scholarships under the Ministry of Education and Ministry of Religious Affairs.
• $44.7 million for recruitment of experts and teaching staff, including recruitment through the Centre for British Teachers (CfBT).
• $1.9 million in private school allowances for students with special needs.
• $1.5 million for Miftahun Najah scheme to provide school supplies for underprivileged children.
• $20 million for i-Ready, Skillsplus, SPIN and Tradeskills programmes.
• $2.3 million to fund research activity at higher education institutions.
— With additional reporting from Hazirah Zainuddin