08 February 2011


TRANSLATION FROM PORTUGUESE: LUSA NEWS AGENCY: PRESIDENT REQUESTS COURT’S ADVICE ON CONSTITUTIONALITY OF 2011 NATIONAL BUDGET PASSED BY THE PARLIAMENT Dili, 7 Feb 2011 (Lusa) - The President of the Republic of Timor-Leste has requested that the Supreme Court of Appeal appraise the constitutionality of the National Budget, Lusa was informed by a judicial source.

The National Budget was first approved on a first reading by the National Parliament on 14 January 2011 increasing to US$985 million, but, after the second reading debate it was passed with an amendment by the Parliamentary Majority Alliance (AMP) who support the government, with an increase of US$282 million for electrical infrastructure, ending up comprising a total of US$1.26 billion.

The President of the Supreme Court of Appeal, Claudio Ximenes, confirmed to Lusa having received the request for a constitutional appraisal from the President of the Republic, stating in the meantime that it was not the first this has happened.

“There have been other cases, in relation to other laws that the President of the Republic sent to the court for review prior to proclaiming them and the same happened with other National Budgets previously, so it is not new to the court,” he said.

According to the President of the Supreme Court, the opinions of the court are delivered “according to the time available on the court’s agenda and the urgency of the matter,” which was requested in this case.

“The President of the Republic asked for the appraisal to be undertaken urgently,” he clarified.

LA'O HAMUTUK - 07 February 2011

Last Friday, La'o Hamutuk wrote a letter to President Jose Ramos-Horta (Tetum original) urging him not to promulgate the $1.3 billion 2011 State Budget that Parliament passed at the end of January.

Today, the President asked the Court of Appeals to review the legality and constitutionality of this law, which is a 98% increase over the original 2010 State Budget. We hope that the Court will make a wise decision and advise the President to return the Budget Law to Government and Parliament for redrafting.

The main points in La'o Hamutuk's letter are:

•Unsustainable spending threatens the goals of the Petroleum Fund Law.

Timor-Leste will spend $1,306 million dollars under this budget, including $1,055 million transferred from the Petroleum Fund during 2011 and $141 million carried over from unspent appropriations in the 2010 Budget, which also comes from the Petroleum Fund. This increase is not justifiable, especially since recent exploratory oil wells were dry.

•The Infrastructure Fund is a bad precedent.

Nearly half of this year’s budget is for the Infrastructure Fund and the Human Capital Development Fund. The Government says it is establishing these Special Funds according to the 2009 Budget and Financial Management Law, but this interpretation of that law undercuts the Constitutional powers of Parliament "To deliberate on the State Plan and Budget and the execution report thereof" and "To monitor the execution of the State budget.” We also believe it is too soon to allocate funding to execute the National Strategic Development Plan (PEDN), which Parliament has never seen.

•The Heavy Oil Electricity Project could be a black hole.

This Budget allocates $448 million for heavy oil power plants and transmission lines, but the Government has not provided enough information. For years, the project has been plagued by misguided concepts, lack of planning, irregular procurement, unreliable contractors, unmet promises, environmental negligence and pervasive secrecy. Timor-Leste has already spent more than $100 million on this project, and before spending a half-billion dollars more, we encourage the President to examine it carefully.

•The oil price predictions are not prudent.

In the 2011 State Budget, the Government assumed future oil prices 50% higher than they assumed last year. This violates the Petroleum Fund Law that “All assumptions made shall be prudent, reflect international best practice and be based upon internationally recognized standards.” Policies based on wishes rather than prudence could squander the nonrenewable resource birthright of our children.

•Please exorcise the “Resource Curse.”

The level of spending in the 2011 budget brings Timor-Leste into the “resource curse” and threatens our future financial stability. The State institutions funded by this budget should ensure that the people’s resources are used for the people’s benefit – not for narrow election objectives.

Therefore, we believe that you, as “the Head of State and the symbol and guarantor of national independence and unity of the State and of the smooth functioning of democratic institutions,” as described in our Constitution, should use your powers to rescue our State from economic instability and future poverty, as financial insecurity also threatens our national independence and unity.

Jose A. Fernandes Teixeira
Deputado da Bancada Parlamentar da FRETILIN
Parlamento Nacional da Rep. Dem. de Timor-Leste
Telemovel: +670 728 7080

Member of Parliament - FRETILIN
National Parliament of the
Democratic Republic of Timor-Leste
Mobile: +670 728 7080

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