Parliament unanimously approved a $3.4 billion national budget yesterday despite the continued absence of opposition lawmakers boycotting the Assembly over widespread irregularities in July’s national election.
Officials said the budget, which allocated about $400 million more than last year’s, was intended to sustain economic growth of seven per cent and reduce poverty by one per cent.
The sizeable increase on last year’s budget – about 13 per cent – will see significant boosts in spending on education, defence and internal security, including “anti-terrorism” training.
Even had the Cambodia National Rescue Party’s 55 elected lawmakers attended yesterday’s session, with 68 elected MPs, the Cambodian People’s Party has the simple parliamentary majority needed to pass the budget.
Sixty-six ruling-party lawmakers voted in favour of passing the spending bill yesterday.
The opposition has faulted past budgets for allocating too much to funding security at the expense of health and education, and for borrowing too much from foreign governments.
In this year’s budget, the ministries of defence and the interior will get $489 million in total – an increase of about 17 per cent compared with last year.
The Ministry of Social Affairs will get $141 million, up 37 per cent, while $335 million will go to the Ministry of Education, up 20 per cent on last year.
But it was not immediately clear where the extra money would come from, nor where about 44 per cent of the budget catagorised as “unallocated expenditure” would end up.
Aun Porn Moniroth, the recently appointed Minister of Economics and Finance, said that an expanding agricultural sector would grow about 4.2 per cent, helping to pay for some of the planned spending.
“Government spending in 2014 is to ensure annual economic growth of around seven per cent and to reduce the poverty rate by at least one per cent per year,” he said.
Increased exports to the European Union – particularly garments – under its Everything But Arms treaty would also help make up for the shortfall, he added.
The budget suggests $2 billion will come from taxes on income, property, petrol, casinos and other businesses. An additional $350 million is expected to be raised from levies on the sale of state property and the granting of licences and concessions for forestry, fishing and mining.
Cheam Yeap, a senior Cambodian People’s Party lawmaker, said that although additional money would be raised through taxation, it would not be enough to pay for all of the spending outlined in the budget.
Yeap declined to go into detail about whether the government was considering targeting companies operating economic land concessions to raise tax, as the opposition has suggested it should. Poor rural communities, he claimed, would be exempt from property tax increases.
“The ruling CPP’s policy is exemption from all tax of villagers’ agricultural land, therefore [tax increases] will not affect individual villagers,” he said.
Once again, foreign loans will carry a significant part of the burden, with the government borrowing some $3.61 billion over the next three years, according to the budget, including $920 million in loans this year alone from China, South Korea and Japan.
Political analyst Kem Ley said the government had not gone far enough to alleviate concerns that the budget would serve the interests of the ruling party.
“I think they could have done more. If the government wants to reform they should open the space to set up a mechanism at the Ministry of Economics and Finance…to receive feedback,” he said.
“It’s not a good budget, just adopted for political purposes rather than strengthening the country.”