Prime Minister Mercelina: “Yes, the budget is too small, but our fixes must be realistic"

GREAT BAY--Prime Minister Dr. Luc Mercelina expanded today on his fiscal outlook following last week’s Council of Ministers press briefing, where the Minister of TEATT Grisha Heyliger-Marten stated that the current Xcg 530 million national budget is inadequate by ANG 200–250 million.

“Do I agree that we deserve more in our national budget? The answer is yes,” the Prime Minister said. “But we must also be honest about what a country of our size can realistically raise and manage.”

Dr. Mercelina underscored the weight of long-standing obligations. “We have a loan balance of more than Xcg 1.3 billion with the Netherlands. We are paying more in interest than in principal. If we don’t address this, my grandchildren, who I don’t have yet, would still be paying,” he said, calling for a candid national conversation about the trajectory of public debt and debt-service costs.

He cautioned against assuming a quick fiscal fix: “This is the 12th government since 10-10-10 and I am the 8th Prime Minister; the seven before me were never able to balance an annual budget. Do you think I am so exceptional to be able to do it when they couldn't not? Do I have a magic formula? I must be honest: our reality is not that of a large country.”

While last week’s discussion focused heavily on revenue, the Prime Minister said expenditure discipline remains essential. “We cannot just spend money to spend money. We have to control our expenses while improving the services people rely on,” he noted. Asked about cost-containment in government travel, he added: “I will look at every detail where we can save money for government.”

At the same time, he pointed to the fixed costs of operating a full state apparatus for a relatively small population. “We are about 60,000 people but must maintain the institutions that define a country, Parliament, the Social Economic Council, the General Audit Chamber, the Ombudsman, justice and police services, health and education systems. Those obligations are real, and they cost money.”

The PM reiterated the structural pressures on health financing. Using illustrative figures, he noted that large groups, approximately 15,000 children, 15,000 seniors (65+), and around 15,000 undocumented residents, constrain the effective contributor base. “You cannot expect a relatively smaller number of contributors to finance health care for the entire population and call that sustainable,” he said. “Any credible national health-insurance model must broaden the contributor base if we want a sustainable system.”

Pressed on what an “adequate” budget would look like, the Prime Minister tied the number to concrete nation-building needs. “If you want to talk about building a nation, I need a Police Academy. I need a National Development Bank. I need an education system aligned with labor-market needs,” he said. He added that long-term questions, such as future currency arrangements or central-bank architecture “in a different context”, must be handled soberly and in sequence. “If you want all this, you can start calculating how much more we need. That’s the sober discussion we must have.”

Addressing recurring calls for independence, he stressed fiscal foundations first. “There is an enormous drive for direction and independence,” he said. “But as long as we cannot find a better balance between spending and revenues, a future balanced budget that meets the country’s needs, talk of independence remains difficult, because everything has a price tag.”

“We acknowledge challenges with poverty and education, but compared to many in the region we are not doing so badly,” he said. “Our responsibility is to keep improving, carefully, honestly, and with both feet on the ground: strengthen revenue administration, broaden the health-care contribution base, scrutinize expenditures, and service our debt more smartly. We will increase revenues where we can, and we must contain costs. Both are necessary if we’re serious about results.”

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