Opposition Slams 2006 Draft Budget as Non-Transparent

Parliament approved 2006 draft budget with a 162 to 20 vote in its first hearing on December 23.

Although opposition parliamentarians hailed increased budgetary targets for 2006, they criticized draft budget as non-transparent, which enables the government to carry out uncontrolled spending of about GEL 500 million.

The Parliament held hearing on December 22 on revised 2006 draft budget, which sets revenues for next year are at GEL 3 068 600 000 (approximately USD 1.7 billion) and expenditures at GEL 3 285 400 000 (approximately USD 1.8 billion).

Opposition parliamentarians from the New Rights and Democratic Front were mainly complaining regarding the non-transparency of the budget. The opposition claims that total of about GEL 500 million (USD 277 million) are envisaged for, as the draft budget reads “other goods and services,” and the draft does not give a detailed list of those needs for which this GEL 500 million will be spent.

“The calculation shows that 16% of entire expenditures [of the budget] are envisaged for these obscured and unclear ‘other services and goods.’ In particular, if we look into the expenditures envisaged for the President’s Administration, we will see that 40% of its expenditures are envisaged for ‘other goods;’ in case of the Finance Ministry’s administration this figure reaches 64%. The same can be said in case of the Ombudsman’s Office,” MP Ivliane Khaindrava of the Republican Party said at the parliamentary hearing.

“It is absolutely unclear what kind of needs will be covered by these funds; so it is absolutely natural if we cast doubts and say that the draft budget is non-transparent,” he added.

The opposition fears that those expenditures which are not prescribed in details in the draft budget might be used by the authorities for campaign ahead of the local self-governance elections planned in 2006.

But parliamentarians from the ruling National Movement party, as well as the cabinet members, downplayed the oppositions’ criticism as “populism and demagogy.”

Prime Minister Zurab Nogaideli who presented the draft to the Parliament, said that this is “the most transparent” budget Georgia has ever had. 

“Budget has never been as transparent as it is now. There are detailed list of activities which will be financed in the draft budget… Moreover, the draft prescribes in details what should be the result of certain activities, which will be financed,” PM Nogaideli said.

The opposition also criticized the government for making “unrealistic forecasts” for next year. The 2006 draft budget sets inflation rate for next year at 5-6%. According to the official data, inflation rate was 7,8 in 2005.

“Price of energy resources – gas price – will increase in Georgia next year. So it is unknown how the government plans to maintain inflation rate at 5-6%,” MP Irakli Iashvili of the New Rights party said.

Even Chairman of the Parliamentary Committee for Budgetary and Financial Issues Irakli Kovzanadze admitted that 5-6% inflation rate “is an optimistic forecast.”

President of the Georgian National Bank Roman Gotsiridze told parliamentarians that “our target next year will be the inflation not to reach two digit figures.”