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Logo of Phnom Penh Post newspaper Phnom Penh Post - Parliament debates annual budget; education and health likely winners

Parliament debates annual budget; education and health likely winners

T HERE will be somewhat more money for health care and education and a little less for defense in 1996 if the National Assembly passes a 1452.3 billion riel ($580.9 million) spending plan sent its way by the Council of Ministers, top financial officials said.

The largest single chunk of the budget - about 27.5 percent - will continue to go towards defense and security as the government faces continued fighting with the Khmer Rouge.

But as a percentage of the budget, defense and security spending is actually declining slightly from 1995, said Sun Chantol, secretary general for the Council for Development of Cambodia (CDC).

He said total planned expenditures are up about 15 percent from the 1995 budget, which had been revised upwards at mid-year by about 20 percent due to higher than anticipated tax collections.

"It's a good budget because we've set up priority areas for agriculture, education and health care," said Chea Peng Chheang, undersecretary of state for the Ministry of Economy and Finance.

He and other officials said they could not discuss the document in any detail until after it passes the National Assembly.

The budget was scheduled for approval by the Assembly by today.

Two sources involved in the process said they expected the Assembly to rubber stamp the budget without changes because there wouldn't be enough time for members to study it and debate it.

The budget by law is supposed to be approved by December 31.

The Council of Ministers signed off on it Dec. 13 and sent the draft to committee last week.

The budget was drafted by the Ministry of Finance after receiving financial requests from all the ministries.

The 1996 budget is premised upon the government receiving revenues from three sources:

  • 577 billion riel ($230 million) from tax and customs revenues,
  • 220.2 billion riel ($88 million) from non-tax revenue such as timber royalties, fishing rights or state leases,
  • and 460.3 billion riel ($184.1 million) from foreign project aid and foreign financing.

The royalities from timber cutting have been cut dramatically to 22.5 billion riel ($9 million) from 86.9 billion riel ($34 million) in 1995, due to the ban on logging exports enacted in May.

The 1996 timber revenues will come from auctions of stockpiled timber, officials said.

The increased revenues anticipated in the new budget are due to better collection of customs duties and other taxes.

The government established a series of new income taxes this year, but tax collection is haphazard and those taxes are yet to contribute significantly to government revenues.

Chheang said in 1996 the impact of some of these new tax revenues would start to be seen soon.

Under the new budget the Defense Ministry will get 400 billion riel ($160 million), down from 412.4 billion riel ($164.9 million) in the 1995 revised budget.

Two of the big winners in the draft budget were:

  • Ministry of Health: set to receive 122.1 billion riel ($48 million), about eight percent of the total spending. That is up from 61.5 billion riel ($24.6 million) in 1995.
  • Ministry of Education would receive 171 billion riel ($68.4 million) or 11 percent of the total budget.

That is up from 124 billion riel ($49.6 million) in 1995.

The Ministry of Agriculture is also getting more money for irrigation projects in the provinces. Those funds come from foreign aid.

The proposed spending for civil service wages is also generally unchanged.

That is in line with the government's pledge to reduce the ranks of the civil service ten percent in 1996, and another ten percent in 1997.

The 1996 budget puts Cambodia's debt at 57.2 billion riel.

That debt is due to loans from agencies such as the World Bank.

The budget also assumes that the economy will grow next year at 7.1 percent.

The gross domestic product was put at 6.61 percent for 1995.

Inflation is expected to come in at about five percent for the 1995 calendar year.



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